Determine the Max Value for Fincen 114 on transfers btw the banks

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cakik55
Posts: 12
Joined: Wed Mar 30, 2022 10:59 pm

Determine the Max Value for Fincen 114 on transfers btw the banks

Post by cakik55 »

I have already submitted my Fincen 114. and then found this law firm website that is saying...

https://freemanlaw.com/the-fbar-report- ... d-to-know/

"Aggregate Value Over $10,000
The final criterion triggering the FBAR filing requirement is the aggregate value of all foreign financial accounts in which the person has a financial interest, or over which the individual has signature or other authority, must be greater than $10,000, valued in U.S. dollars, at any time (on a particular day) during the calendar year.

Steps to aggregate account values:
Each account should be separately valued according to the steps outlined in IRM 4.26.16.3.2.2 to determine its highest valuation during the year in the foreign denominated currency.

Exception:
Money moved from one foreign account to another foreign account during the year must only be counted once."

This exception part confuses me... I often transferred some money from one bank to the other for looking for the better interest rates last year. I filed Fincen 114 with the max amount for each bank account no matter the money was transferred from one bank to the other, meaning the money amount is showing on the both accounts.
e.i. I transfer $10k from one bank to the other, do I have to file only $10k for one account or file $10k for one, $10k for the other even I had only $10k total? I am wondering if I need amending my Fincen 114.
nelsona
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Re: Determine the Max Value for Fincen 114 on transfers btw the banks

Post by nelsona »

I wouldn';t worry about it. Put the max value for each account. That is what they want to know. It doesn't matter if they are doubled up.
nelsona non grata. Non pro. Search previous posts. Happy Browsing :D
cakik55
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Re: Determine the Max Value for Fincen 114 on transfers btw the banks

Post by cakik55 »

Thank you, nelsoan as always. Whew, I won't amend my file then:)
nelsona
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Re: Determine the Max Value for Fincen 114 on transfers btw the banks

Post by nelsona »

And only read fincen instructions when you have trouble sleeping.
nelsona non grata. Non pro. Search previous posts. Happy Browsing :D
SHAM
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Re: Determine the Max Value for Fincen 114 on transfers btw the banks

Post by SHAM »

nelsona wrote:
> I wouldn';t worry about it. Put the max value for each account. That is
> what they want to know. It doesn't matter if they are doubled up.
HI Nelsona,
This question was asked by my friend who
Is in the same situation,
he told me that he got his Green card on 2020, he submitted his first tax return and FBAR for Tax year 2020 and then recently for 2021.
In 2020 he had several bank term deposits (same bank) in addition to current bank accounts , some of the term deposits were matured in 2020 while the other were matured on 2021, obviously the amounts of the matured deposits (2020) were transfered directly to his current account, but due to his lack of knowledge about the FBAR reporting requirements, and to avoid overstating the total amount, he presumed that the sum amount of the matured deposits were considered already in his current bank account which was subsequently reported in the FBAR, as such he didn't report the matured deposits in the FBAR 2020, while he did report the umatured one, what he should do now? Any action should he take to fix this mistake, can he ammend the Fbar, any consequences on him due to this mistake, penalty etc.....
Regards
nelsona
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Re: Determine the Max Value for Fincen 114 on transfers btw the banks

Post by nelsona »

I believe in just moving forward, no point going back. as long as a =n FBAR was filed.
but always reporting ALL accounts a their max value. Over reporting will never be punished.
nelsona non grata. Non pro. Search previous posts. Happy Browsing :D
SHAM
Posts: 7
Joined: Wed Sep 21, 2022 3:58 am

Re: Determine the Max Value for Fincen 114 on transfers btw the banks

Post by SHAM »

nelsona wrote:
> I believe in just moving forward, no point going back. as long as a =n FBAR
> was filed.
> but always reporting ALL accounts a their max value. Over reporting will
> never be punished.
Thank you Nelsona for your quick response,
He will take your advise and No ammendment is reqiured but will consider to report all the bank term deposits regardless wither its matured or not in the same tax year.
Morover
1-He just informed also that he discovered the presence of a typo error in one of his bank account number (the mistake in one digit only) in the submitted TAX return 2020 and FBAR 2020 as well, however the said bank account number was reported correctly in 2021TAX return and FBAR 2021as well, his question is any requiremnt to ammend his tax return 2020 and FBAR 2020?

2-let us say that he had a term deposit(360 days) and that was commenced on 1july 2019 and get matured on 1july 2020, the interest is $1000, he became lawful green card holder on 1 January 2020, his understanding that only 50%($500)
Should be reported only because during the half period of the term deposit he wasn't green card holder (from 1 July 2019 till 31 December 2019) is that correct?

Regards
nelsona
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Re: Determine the Max Value for Fincen 114 on transfers btw the banks

Post by nelsona »

2. Of course this is incorrect. Report the maximum value and stop thinking about it. It's not worth, your friend's or your time worrying about it.
nelsona non grata. Non pro. Search previous posts. Happy Browsing :D
SHAM
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Joined: Wed Sep 21, 2022 3:58 am

Re: Determine the Max Value for Fincen 114 on transfers btw the banks

Post by SHAM »

nelsona wrote:
> 2. Of course this is incorrect. Report the maximum value and stop thinking
> about it. It's not worth, your friend's or your time worrying about it.
HI Nelsona,
Thank you,

1-Any action is reqiured for point #1 above?

2- I am sorry, I haven't been clear enough in question#2 above, I meant (in his case) he considred 50% from the amount of the bank interest for the sake of considering the realted income Tax only but not for the FBAR, is that correct?
Regards.
nelsona
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Re: Determine the Max Value for Fincen 114 on transfers btw the banks

Post by nelsona »

Please read my posts. I'm done on this one.
nelsona non grata. Non pro. Search previous posts. Happy Browsing :D
ND
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Re: Determine the Max Value for Fincen 114 on transfers btw the banks

Post by ND »

cakik55- no reply has been to point because the entire premise of your question is mistaken. The exception of not double counting moved funds applies only to the 10,000 aggregate test to see whether or not you're at all required to file FBAR. It does not apply to the actual FBAR reporting where you must list each account if even it's the same funds moved around.

Also note the correction to your citation - it's actually in 4.26.16.2.6 (06-24-2021) https://www.irs.gov/irm/part4/irm_04-02 ... 2786864720
Aggregate Value Over $10,000
The final criterion triggering the requirement to report a foreign account on a timely-filed FBAR is the aggregate value of all foreign financial accounts in which the person has a financial interest, or over which the individual has signature or other authority, must be greater than $10,000, valued in U.S. dollars, at any time (on a particular day) during the calendar year.
Steps to determine aggregate account values:
Each account should be separately valued according to the steps outlined in IRM 4.26.16.2.2.2 to determine its highest valuation during the year in the foreign denominated currency.
Exception: Money moved from one foreign account to another foreign account during the year must only be counted once.
SHAM
Posts: 7
Joined: Wed Sep 21, 2022 3:58 am

Re: Determine the Max Value for Fincen 114 on transfers btw the banks

Post by SHAM »

nelsona wrote:
> Please read my posts. I'm done on this one.

HI Nelsona,

We would like to appreciate your continued help and the valuable information your are providing,

My friend and his wife are both LPR in the USA and have Green cards, Currently both of them are working outside the US and paying US Tax jointly, his wife has special conditions which is requiring her to stay outside the USA for long period, at some points she might not be able to fulfill the residency requirements, as such she is thinking to abandon her residency status and voluntary surrendering her green card through mailing the realted form( i-407) along with her green card by courier from out side the USA , let us say that she did that, the questions are as follows:


1-Does she is still reqiured to continue with paying Tax for her world wide income and continue with her husband to file jointly the Tax return, or just her husband only is reqiured to submit Tax return individually for his income only.

2-Does the residency status of her children will be automatically abandoned by her abandonment of her status ?Noting that the following statement is mentioned in the form's (i-407) instruction (Generally, if a parent abandons LPR status, any minor children in that parent's custody will also have abandoned their LPR status).

3- let us say that both parent have abandoned there residency status, which age of the child is considerd minor and there residency status is considered abandoned.


4-In case that she is no longer reqiured to file and pay USA tax, Does her husband can still claim full standard deduction and child credit in his tax return?

5- When she can consider the effective date of the abandonment for the tax, is it the date when the application( i-407) along with the green card have been delivered by the courier to the USCIS, or the date after the application has been processed and completed by USCIS which is expected within 60 days from the receiving date.

Thank you in advance
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