FBAR

Old Dec 9th 2015, 11:16 pm
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Default FBAR

I had an inheritance over £50,000. I transferred £45,000 to USA. Do I need to file FBAR as my money in UK is now under $10,000. Or do I have to file because at one point int he year I had more than ¢10,000?
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Old Dec 9th 2015, 11:36 pm
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Default Re: FBAR

Originally Posted by samiam1066 View Post
I had an inheritance over £50,000. I transferred £45,000 to USA. Do I need to file FBAR as my money in UK is now under $10,000. Or do I have to file because at one point int he year I had more than ¢10,000?
If you had a total amount...in one or more accounts...of over $10K at anytime in the tax year it must be reported.
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Old Dec 9th 2015, 11:53 pm
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Default Re: FBAR

Thank you.
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Old Dec 10th 2015, 1:03 am
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Default Re: FBAR

As mentioned, if it was over $10,000 at any point during the year, you have to file. I would also note that if the total amount of ALL your overseas accounts is > $10,000 USD at any point in the year, then you will have to report ALL accounts. I wanted to mention this because you have one account with about $7,500 USD in it so if you happen to have a few other small ones you might find yourself in an FBAR situation.

Account #1 - £5,000 ($7,500USD)
Account #2 - £1,500 ($2,200 USD)
Account #3 - £500 ($750 USD)
Account #4 - £1 ($1.50)

You must report ALL accounts on your FBAR, even the one with £1.

Also note that the $-£ rate can shift you up into reporting should the pound strengthen over the next year or two (as it did in the mid-2000s).
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Old Dec 10th 2015, 11:49 am
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Default Re: FBAR

Thank you.
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Old Dec 10th 2015, 1:47 pm
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Default Re: FBAR

It's worse. You can not actually have $10k in money and still have to file. Just moving $5k between two accounts in a year will cause a need to file.
Also in a inheritance situation you can have a financial interest in accounts not owned by you while the executor sorts out the estate. We reported my wife's late mother accounts on our FBAR for the year she died.
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Old Dec 10th 2015, 4:09 pm
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Default Re: FBAR

Originally Posted by Neillc37 View Post
It's worse. You can not actually have $10k in money and still have to file. Just moving $5k between two accounts in a year will cause a need to file.
Not quite correct.

The official wording is:

the aggregate value of all foreign financial accounts exceeded $10,000 at any time during the calendar year reported.
Therefore moving $5k between accounts does not affect the aggregate value at that time.

However, when you complete the FBAR you need to put the maximum value, during the year, of each account, so on the form you may actually include that $5k twice, but such a transfer does not affect the initial assessment as to whether you need to complete the FBAR.
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Old Dec 10th 2015, 4:58 pm
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Default Re: FBAR

There are two different questions that tend to get confused:
1. Do I need to file? Only if the aggregate value of the foreign financial accounts exceed $10,000 at any time during the calendar year.
2. If I do need to file, what do I report? determine the maximum value of each account (in the currency of that account) during the calendar year being reported; convert those maximum values to USD using the Treasury's Financial Management Service rate; report those values for each account.

Last edited by MidAtlantic; Dec 10th 2015 at 5:00 pm.
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Old Dec 10th 2015, 5:08 pm
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Default Re: FBAR

Originally Posted by Neillc37 View Post
I
Also in a inheritance situation you can have a financial interest in accounts not owned by you while the executor sorts out the estate.
I'm not sure that is correct. I have understood the requirement to be on accounts over which you have signature authority. If the executor is the only one who can control the money in the account it isn't yours until they give it to you.

Originally Posted by MidAtlantic View Post
2. If I do need to file, what do I report? determine the maximum value of each account (in the currency of that account) during the calendar year being reported; convert those maximum values to USD using the Treasury's Financial Management Service rate; report those values for each account.
Including open accounts with a nil total if other accounts take you over the $10k limit. Fell foul of that one myself.
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Old Dec 10th 2015, 5:32 pm
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Default Re: FBAR

Originally Posted by lansbury View Post
I'm not sure that is correct. I have understood the requirement to be on accounts over which you have signature authority. If the executor is the only one who can control the money in the account it isn't yours until they give it to you.



Including open accounts with a nil total if other accounts take you over the $10k limit. Fell foul of that one myself.
Signatory authority or a financial interest in. I ran it by my tax attorney. I had to include them.
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Old Dec 10th 2015, 5:36 pm
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Default Re: FBAR

Originally Posted by celticgrid View Post
Not quite correct.

The official wording is:



Therefore moving $5k between accounts does not affect the aggregate value at that time.
Unfortunately that not the official word. The IRS successfully defeated a CPA in tax court arguing that what the IRS says on it's web site and forms is not legally binding (IRA rollover timing, once a year stuff). Only the tax code itself has any weight. To understand if you have to file the FBAR you have to go to title 31. I have seen legal types weight in in the past that transfer amounts are counted twice. There might have been a change in 2014 though that changed this.
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Old Dec 10th 2015, 6:35 pm
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Default Re: FBAR

Originally Posted by Neillc37 View Post
I have seen legal types weight in in the past that transfer amounts are counted twice. There might have been a change in 2014 though that changed this.
So although you earlier state this definitively, you are now unsure?

I've seen legal types weigh in with all sorts of rubbish - it is what they do for living, after all.

You may be right. Some citation would help. Luckily I am unaffected by any lack of clarity in this area.
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Old Dec 10th 2015, 6:57 pm
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Default Re: FBAR

If in doubt then file the FBAR report. It takes very little time and doesn't even cost the price of a stamp these days.
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Old Dec 10th 2015, 7:09 pm
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Default Re: FBAR

Originally Posted by celticgrid View Post
So although you earlier state this definitively, you are now unsure?

I've seen legal types weigh in with all sorts of rubbish - it is what they do for living, after all.

You may be right. Some citation would help. Luckily I am unaffected by any lack of clarity in this area.
Actually the situation doesn't arise as the money cannot be in 2 accounts at the same time. Therefore the aggregate amount stays the same.
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Old Dec 10th 2015, 7:36 pm
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Default Re: FBAR

Originally Posted by lansbury View Post
Actually the situation doesn't arise as the money cannot be in 2 accounts at the same time. Therefore the aggregate amount stays the same.
I would agree with that. That's my position.

No-one in their right mind would posit otherwise, but I do however acknowledge that Neillc37 is talking about the IRS and lawyers, so "in their right mind" is not so cut and dried
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