FBAR Exchange Rates & FBAR Maximum Account Value
FBAR Exchange Rates & FBAR Maximum Account Value: Two of the most common questions we receive about the FBAR, is which exchange rate do I use, and how do I calculate the FBAR Maximum Account Value. Briefly, the FBAR is actually a FinCEN Form, in which the IRS has taken over compliance enforcement. FinCEN is the Financial Crimes Enforcement Network, and the FBAR is FinCEN Form 114. While confusion surrounds how certain items are reported on the FBAR — such as cryptocurrency — FinCEN has provided guidance on which exchange rates to use, and how Maximum Account Value is reported.
Which Exchange Rates for FBAR?
As provided by FinCEN:
“Step 2. In the case of non-United States currency, convert the maximum account value for each account into United States dollars. Convert foreign currency by using the Treasury’s Financial Management Service rate (http://www.fiscal.treasury.gov/fsreports/rpt/treasRptRateExch/treasRptRateExch_home.htm ) for the last day of the calendar year.
If no Treasury Financial Management Service rate is available, use another verifiable exchange rate and provide the source of that rate. In valuing currency of a country that uses multiple exchange rates, use the rate that would apply if the currency in the account were converted into United States dollars on the last day of the calendar year. “
Calculating FBAR Maximum Account Value
As further provided by FinCEN:
“Determine the maximum value of each account (in the currency of that account) during the calendar year being reported. The maximum value of an account is a reasonable approximation of the greatest value of currency or nonmonetary assets in the account during the calendar year.
Periodic account statements may be relied on to determine the maximum value of the account, provided that the statements fairly reflect the maximum account value during the calendar year.
For Item 15, if the filer had a financial interest in more than one account, each account must be valued separately.
For an account denominated in U.S. Dollars, the maximum value of the account is the largest U.S. Dollar value of the account during the report year. “
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