# Another day, another FBAR question



## ConfusedinCroatia

For those that have filled out and filed FBARs. 

How are we supposed to handle multi currency accounts?

In the bank they are telling me that they are technically separate accounts but they all have the same account number with a designation of EUR, USD or HRK (Croatian Kuna) or whatever currency you are holding your money in.

Let's say you have $5,000 on your dollar account and transfer it to your local currency account, by the rules as the way I understand them on both accounts I had a value of $5,000. Do I add accounts separately or do I list the one account number and find the highest value for that year regardless of currency?


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## BBCWatcher

If it has the same account number, the latter.


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## Bevdeforges

They really don't care what currency the account is in - or whether it is one or several. Convert the various amounts to US$ and add them up.
Cheers,
Bev


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## ConfusedinCroatia

Thanks for the quick replies!!


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## ConfusedinCroatia

Hypothetical question.

A person opens an account in ABC BANK. He deposits $5,000 in a dollar account with its own specific account number (let's say the acct. Number is 12345). At the time of opening the account said person is also designated a local currency account with its own specific account number ( let's say this acct. Number is 6789). Now said person does an in bank transfer of $5,000 from acct. 12345 to acct. 6789. In reality the person had $5,000 dollars, but according to fbar rules as I understand them, said person had an aggregate of $10,000 dollars because he had a balance of $5,000 on two seperate accounts in the same bank. When this happens, how do you not over report?

Thanks in advance.


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## Bevdeforges

All they are really interested in is the fact of the accounts. "Over-reporting" is not a problem. In fact, better to "over-report" than to "under-report."
Cheers,
Bev


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## ConfusedinCroatia

I understand the reporting aspect, but reporting in this fashion seems kind of stupid as it could appear that you have more money than you actually have or might have had at one point. 

Thanks Bev once again for the quick response. Just going to add everything up, file everything and let the chips fall where they will.


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## BBCWatcher

FBAR is very simple. I'm surprised people try to make it complicated. It's not. "Did the aggregate value of all your foreign accounts exceed $10,000 at any moment in time last year?" If the answer is yes, you file a report. If not, no.

"Your" has a specific, fairly broad definition. "Foreign accounts" does too. An account at Citibank Singapore, for example, is a foreign account for FBAR purposes.

In the hypothetical you describe -- depositing $5,000 and transferring that same $5,000 between two foreign accounts (or 58 foreign accounts for that matter) -- the answer is no. *Obviously* no, assuming that $5,000 is the total.


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## ConfusedinCroatia

Maybe I should have set the example at $10,000. 10,000 on account a automatically makes me an fbar filer, I transfer that money within the calendar year to account b. Now I am filling out the fbar form where there are 2 accounts that had a balance of $10,000. Or am I still missing the point?


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## BBCWatcher

At $10,000 aggregate at any moment during the calendar year, you've met the filing threshold for the calendar year. So you must file.

_What_ you file is then a separate issue. And yes, you would report both accounts, and you'd list both at $10,000. You report the peak value of each account. The fact that the peaks do not coincide is immaterial.

Yes, you could have $10,000, move that same $10K 58 times across 58 accounts during one calendar year, and thus report 58 accounts each with a peak value of $10,000 for a report total of $580,000. So what?

Follow the instructions. They're not complicated.


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## ForeignBody

BBCWatcher said:


> FBAR is very simple. I'm surprised people try to make it complicated. It's not. "Did the aggregate value of all your foreign accounts exceed $10,000 at any moment in time last year?" If the answer is yes, you file a report. If not, no.
> 
> "Your" has a specific, fairly broad definition. "Foreign accounts" does too. An account at Citibank Singapore, for example, is a foreign account for FBAR purposes.
> 
> In the hypothetical you describe -- depositing $5,000 and transferring that same $5,000 between two foreign accounts (or 58 foreign accounts for that matter) -- the answer is no. *Obviously* no, assuming that $5,000 is the total.


If only it were so simple!

If you refer to Item 15 in the FBAR Instructions you find that you have to take the *maximum value of each account* during the year. It is then the aggregate of these maximum account values (converted to $) that determines if a report is to be made.

So, slightly changing the hypothetical example, if $5001 is deposited, then transferred to another account, the maximum value of each account during the year is $5001, so the aggregate of the maximum values is $10002 and must be reported.

Crazy, but that is what the instructions say.


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## Bevdeforges

The French requirement for reporting foreign accounts is very simple: you report any and every foreign bank account, regardless of the balance. Take that approach with the FBAR reports and it gets a whole bunch easier.
Cheers,
Bev


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## BBCWatcher

ForeignBody said:


> If you refer to Item 15 in the FBAR Instructions you find that you have to take the *maximum value of each account* during the year. It is then the aggregate of these maximum account values (converted to $) that determines if a report is to be made.


No, no, no. Where are you seeing that? (I just checked.)

Step 1: Determine whether you meet the threshold for filing a report at all. If the aggregate value of all reportable accounts at any moment in time in the calendar year was $10,000 or more, yes, you must file a report. See "Who Must File an FBAR" at the beginning of the instructions, on page 1.

Step 2: Report the peak value of every reportable account (that item 15 you see).

You never get to Step 2 unless you get past Step 1.

It couldn't be any clearer, at least at high school English level.


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## ForeignBody

BBCWatcher said:


> No, no, no. Where are you seeing that? (I just checked.)
> 
> Step 1: Determine whether you meet the threshold for filing a report at all. If the aggregate value of all reportable accounts at any moment in time in the calendar year was $10,000 or more, yes, you must file a report. See "Who Must File an FBAR" at the beginning of the instructions, on page 1.
> 
> Step 2: Report the peak value of every reportable account (that item 15 you see).
> 
> You never get to Step 2 unless you get past Step 1.
> 
> It couldn't be any clearer, at least at high school English level.


Item15 Step2:
_If the aggregate of the maximum account values exceeds $10,000, an
FBAR must be filed. An FBAR is not required to be filed if the person did
not have $10,000 of aggregate value in foreign financial accounts at any
time during the calendar year._


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## BBCWatcher

Here are the instructions. Well, what do you know! The language is contradictory in the new instructions. Fabulous, and thanks for pointing that out. Page 1 has a different threshold definition than the one on page 53.

So what to do? Take the definition on page 53, I guess, since it's a perfect superset of the definition on page 1.

Again, thanks for pointing out that discrepancy in the new instructions.


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