Two US Tax Q's: exchange rate; "other" financial assets
 

I left it very late to wrap up my taxes but had two questions that fellow UK’ers who moved to the U.S. may be able to answer correctly. I use Turbotax but even if you’re unfamiliar with that program, but you know your US/foreign tax stuff, you can probably help me. I can ask Turbo but for several reasons [complimentary to BE] I’d rather ask here first.

When I moved to the States I kept 1 checking and 1 savings account at a U.K. bank. They’re over the reporting limit and I’m duly declaring them, plus interest [very small amount], and filing FBARs. All cool so far.

But I’m flummoxed by two Turbo questions that I think its posing in an attempt to fill in my Form 8938.

Q1. “Enter Exchange Rate Used to Value Account in US$”. Using their required source for this info, it revealed the relevant exchange rate to be 0.74 [meaning GBP 0.74 = $ 1.00].

However the calculation needed to obtain the $ value of each account requires that I actually multiply the GBP account value by 1.3513. In other words, although the http://www.fiscal.treasury.gov gives the exchange rate as 0.7400, the number that’s actually relevant is 1.3513 [that is, GBP account val x 1.3513 to get the dollar value].

I’m guessing based on common sense that the number to report is 1.3513 [and not the number that appears on the treasury.gov web page]. But it's odd that the gov would provide it "the wrong way round". Which number do they want entered as the exchange rate?

Q2. “What was the maximum combined value of all Other Foreign Financial Assets at any time during 2017 [in USD]?

Are they asking me to combine my two bank accounts at their max value, or are they asking for the max value of any “Other” foreign assets?

It seems based on the flow of the overall Turbo questions on this topic that they are asking about any others [not the two bank accounts]. On the other hand, the FBAR’s want to know the max combined amount specifically of these two accounts, so that argues in favor of that being what Turbo may also be seeking.

Frustratingly, I can’t see the Form 8938 that it’s creating based on my answers until I pay Turbo, which I’m not ready to do yet because I’ve got other stuff to double-check and I don’t want them to assume I’m done and dusted. But seeing that form might help.

So anyway, thanks in advance to those who truly know the answers and can take the time to respond.

Re: Two US Tax Q's: exchange rate; "other" financial assets
 

We've just done a very similar filing with Turbo Tax so here's how we did it. The exchange figure you want is the $1.35 to change the sterling value into dollars.

When it talks about "other foreign financial assets" it wants you to add all bank accounts, stocks & shares, pensions etc. You're right you will need to pay Turbo Tax before seeing the 8938 but you can still make changes before actually submitting the return. Paying doesn't equal submission so you can always still double check and make changes.

Re: Two US Tax Q's: exchange rate; "other" financial assets
 

Wow, thank-you so much CA-NY. This answers exactly what I wanted to know in every respect.

So I surmised correctly about the exchange rate, but I would have put “zero” for the second issue since I don’t have anything else relevant beyond the two accounts.

What’s weird is why Turbotax wouldn’t be designed to automatically warn me along the lines of “The amount entered here cannot be less than the sum total of the maximum values previously entered.” How difficult would that be? They do that [sometimes] in other comparable situations.

Anyway, most grateful once again to the brains trust here at BritishExpats.com [or “Britnet” as I still call it]. I may only be an occasional visitor, but I do go back a ways!

Re: Two US Tax Q's: exchange rate; "other" financial assets
 

It sounds like you got your question answered okay.

I've used TurboTax for years and I always prefer the downloaded version even though it means paying for it up front. The big advantage I find is that not only can you see the forms being completed as you progress through the return it is very easy to switch between the forms view and the step by step view, and from within a form if you want to see what went into calculating a figure you can click on it and go to the forms that support that calculation.

The downloaded version also allows several returns to be filed and each year our son comes over and does his taxes on my laptop.

Re: Two US Tax Q's: exchange rate; "other" financial assets
 

That's a great point, durham_lad. Thanks very much. I'm going to seriously consider that switch and probably make it.

I've learned a lot since doing taxes myself using this program to the point where I've reached a level of understanding that means the forms themselves, in conjunction with the questions Turbotax asks, will provide greater clarity and therefore more accurate returns.

I've also concluded that a good tax preparer who's really taking the time to understand a client's situation can probably spot strategies and suggest beneficial financial decisions that a layperson might miss. That's probably the best route for people with complex matters.

It's made me both more respectful toward the pro's, but it's also showed me that those part-timers who join companies for tax season, or those that don't take the time to understand their clients' situations and what's best for them, could do a slapdash job or even be a costly menace. Few other people care as much about you, as you do!

It's finding the right person that keeps their eye on the ball that's the elusive trick. Same goes for lawyers [and probably everything else for that matter].

Well, it's tax day so I better get going. Almost done. Thanks again to both responders.