how to amend form 8891

sitonatree · Post by **sitonatree** » Wed Jun 11, 2014 1:21 am

I just noticed that on form 8891 I used the CAD$ for the balance instead of USD$ amount.

Should I use 1040x to amend form 8891? Do I need to attach supporting documents? Also I'm worried if IRS will penalize me for this simple mistake even if it doesn't affect my tax liability?

Thanks for your opinion.

nelsona · Post by **nelsona** » Wed Jun 11, 2014 10:34 am

It is nota big deal. Since these year-end values have no bearing on current or evne future taxation, I wouldn't worry about it.

But, if you feel you must correct it, then do so using 1040-X and attach corrected 8891.

I personally wouldn't bother correcting a line 8 entry. I would only amend an incorrect line 7 or -- if not deferring -- line 10 entry.

sitonatree · Post by **sitonatree** » Wed Jun 11, 2014 9:05 pm

Thanks Nelsona.

On FBRA I reported the correct USD$ for maximum value. On 8891 IRS will see there is no RRSP distribution which means the reported balance on line 8 should be the maximum value for the account during the year. With last year's exchange rate the 8891 reported CAD$ balance is higher than the reported FBRA maximum value (USD$) for the same account.

I was just concerned if IRS will select me for audit after detecting this inconsistency (automatic computer matching?). I have nothing to hide but don't like the extra paperwork. Am I worried too much?

nelsona · Post by **nelsona** » Thu Jun 12, 2014 9:30 am

The year-end value reported on line 8 need not be the maximum value of the account. Fluctuations in excahneg rate and investment values could have drastic effects on maximum value.

There is no 'cross-checking" going on.