The Instructions on 8891 do not mention submitting a exchange rate calculation work sheet , but for the past years filing 8891 I have been to show how I came up with the number on line 8. Is this required? or am I giving the IRS more information that is required.
Thanks
8891 Calculation
Moderator: Mark T Serbinski CA CPA
How exactly have you been 'showing' them? There is no provision on the form to enter an exchange rate, and submitting an extra peice of paper is merely confusing.
Line 8 is simple: value on last day of year in $CDN multiplied by the exchange rate on that day. exchange rate is available of several websites, and the Treasury department knows exchange rates.
Besides, here is ABSOLUTELY no importance tax-wise in this number, ever. I'm unclear as to why they even ask for it, since it doesn't have any basis for future taxation.
The only important number is BOOK value on the first day of the first 1040 you filed, which is not captured anywhere on any 8891.
Line 8 is simple: value on last day of year in $CDN multiplied by the exchange rate on that day. exchange rate is available of several websites, and the Treasury department knows exchange rates.
Besides, here is ABSOLUTELY no importance tax-wise in this number, ever. I'm unclear as to why they even ask for it, since it doesn't have any basis for future taxation.
The only important number is BOOK value on the first day of the first 1040 you filed, which is not captured anywhere on any 8891.
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