How to Determine Maximum Annual Account Balance for FBAR
Due to recent changes, the FinCEN Form 114 (FBAR) due date was moved from June 30th to April 15th. As anyone who has filled out this form knows, this form requires declaration of all non-US financial accounts and the highest balance for each account during the year. Even though this sounds like an easy question to answer, it can actually be quite complex if transfers between accounts occur during the year. This article will address the frequently asked questions related to this issue.
I have transferred funds between accounts; do these balances get counted twice?
Simply put, yes.
But don’t be too concerned. It is understandable if you don’t want to appear to have more assets than you actually have, but the government is not going to give you extra scrutiny for the differences between USD 550,000 and USD 700,000. The US Department of the Treasury is aware that transfers can cause funds to be double counted.
The regulations require you to report “the maximum account value of each account” within the timespan of the FBAR reporting period. Notice that there is no reference to tieing out the balances to the total worth.
So, not only do you not need to adjust your balances to avoid double counting, but in reality it is not the correct way to do it. It is the maximum account balance of each account that must be reported.
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