FBAR Question

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coco1106
Posts: 48
Joined: Sun Jan 20, 2019 3:40 pm

FBAR Question

Post by coco1106 » Fri Feb 08, 2019 4:08 pm

Sorry if this has been asked before, i have searched but I am still not too sure, I am sure our tax accountant will know , but I would like to know before we meet him so I am aware of the situation.
we are duel US/Cdn citzens, we will move next year to Canada

I know we have to file Fed tax for ever, also all accounts have to be disclosed to both IRS and CRS,
with regards to FBAR I know the threshold is $10,000 USD in a foreign account must be reported,

say for instance we have $2000 a month transferred to our cdn acct from our US act located in USA, this is used for living expenses, some months we may spend 1800 others maybe 1700???
after 12 months a total of $24,000 was deposited over a 12 month time frame, but each month we have maybe $100 left over , so at the end of the year we may have $1000 plus in the account............would we be file the FBAR and say we had a $24000 in that account over a 12 month period???
even though at yr end we only have $1000 in that account because the money has already been spent.
I think this will be our situation after the first year once we have purchased a home.



also when we buy our new home in Canada the funds from USA will be transferred to Canada to pay for home ( we will pay cash for the home, we dont want a mortgage, looking at about 450k cdn for the new home...would we file form 8938 since the money will be in a foreign acct ( Canadian bank acct) .....if the money is used to buy a home is it still reported on 8938 ??

I am thinking that this would definitely filed on FBAR even though the money will only be in our acct for a few days until we close on the new home.

I would rather over report all information and be totally transparent.
Thank you again for any in sight on this

nelsona
Posts: 15819
Joined: Wed Oct 27, 2004 2:33 pm
Location: Nowhere, man

Re: FBAR Question

Post by nelsona » Fri Feb 08, 2019 6:19 pm

FBAR applies to ALL your foreign accounts if the total of ALL your accounts is more than $10K US at any one moment in the year.

So if you have 1 account that reached $9999 and three that each had only $1, you would need to report them all. as you exceeded $10K.

I'll let your accountant figure out the FATCA form. You have a larger threshold when you live outside US.
Nelsona Non grata. Non pro. Search previous posts. Taking period between now and June off. Will only answer sporadically.

coco1106
Posts: 48
Joined: Sun Jan 20, 2019 3:40 pm

Re: FBAR Question

Post by coco1106 » Fri Feb 08, 2019 6:43 pm

thank you .

coco1106
Posts: 48
Joined: Sun Jan 20, 2019 3:40 pm

Re: FBAR Question

Post by coco1106 » Fri Feb 08, 2019 9:17 pm

thank you,

I was just unsure,
there will only be one account, the total amount over a 12 month period would be $24,000 , but never that amount at any one time.
$2000 deposited each month , so at any one time there would be only be $2000 , maybe $2300 in the account, if there was carry over from the previous month.

I am not sure if we would file fbar with a total of $24000,,,,but this was spread over a 12 month period.

formerpatriot
Posts: 32
Joined: Mon Feb 23, 2015 4:13 pm
Location: Montreal

Re: FBAR Question

Post by formerpatriot » Fri Feb 08, 2019 10:49 pm

To coco1106:

I'm no expert. But I have some experience.
I have filed my wife's FBAR for the years 2009 to 2018.
Her status was dual citizen living in Canada.
She filed FBAR because the total (combined) value of her Canadian accounts was above 10,000 USD.
(She has now renounced her US citizenship and will no longer file FBAR, but that's a different story...)
As I understand it, for each account she had to report the maximum value of the account during the year.
Example 1: She has an RRSP into which she contributes regularly; typically the account is at its yearly maximum value in December. That's the amount we report on the FBAR (after converting from CAD to USD using the year's average exchange rate).
Example 2: We have a joint bank account in US dollars at a Canadian bank in which we usually keep only a few hundred dollars. However, each year in November she receives an 8,000 USD check from her mom which she deposits into our joint USD account. Within a few days we transfer the 8,000 USD to her Canadian brokerage account. Thus for most of the year the USD bank account has only a few hundred dollars but for a few days in November it has 8,000 plus a few hundred dollars. On the FBAR, she reports that maximum value, say 8,357 USD.

Reading your post, it sounds like the maximum value of your account throughout the year is of the order of $2300. [Look at the balance of the account for each day of the year and find the day where the balance is the largest. That is the amount that goes on the FBAR]. If that maximum value is $2385 and if this is the only foreign account you have, you do not need to file FBAR. If you have other foreign accounts and if the total value of all these accounts is more than $10000, then you are supposed to file the FBAR.

I am no expert. Others will correct me if I'm wrong.
FormerPatriot in Montreal

coco1106
Posts: 48
Joined: Sun Jan 20, 2019 3:40 pm

Re: FBAR Question

Post by coco1106 » Fri Feb 08, 2019 11:55 pm

thank you for the information, I appreciate it.

I am just trying to understand the reporting. we will have a crossboarder accountant, but I would like to educate myself if possible,
your examples are really helpful.

coco1106
Posts: 48
Joined: Sun Jan 20, 2019 3:40 pm

Re: FBAR Question

Post by coco1106 » Fri Feb 08, 2019 11:59 pm

.

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