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Dave CPA, Accountant
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To what degree of accuracy do FBAR forms need to be filled

Resolved Question:

To what degree of accuracy do FBAR forms need to be filled out in respect of securities accounts? Is a conservative estimate based on some kind of documentation sufficient?
Submitted: 2 years ago.
Category: Tax
Expert:  Dave CPA replied 2 years ago.
Hello,

You will want them as accurate as possible. The reason you are being asked to complete the forms is for full disclosure. A good faith estimate wouldn't be prudent for this type of disclosure. Below is a good link from an IRS that goes over Q&A on voluntary disclosures.


http://www.irs.gov/newsroom/article/0,,id=210027,00.html


Customer: replied 2 years ago.
I guess the tricky bit about securities is that, in contrast to cash, shares increase/decrease in value on a daily basis - am I expected to calculate the value of my stock portfolio for each day of the year in order to figure out the maximum value of the account during the year?
Expert:  Dave CPA replied 2 years ago.
The value would be as of the reporting date. So what the value is as of market close. So if the report is for activity through Dec 31, close of business market price is the value of the security for the report
Customer: replied 2 years ago.
Sorry, isn't it the maximum balance during the calendar year that you have to report?
Expert:  Dave CPA replied 2 years ago.

Hello,

 

You are correct and it is at a point in time. I think in your original follow up you were trying to determine the value each day as the maximum value. I was trying to point out the value at a point in time which is the greatest in the year would be sufficient and the account statements as back up for audit purposes would suffice to make that determination.

 

Determine the maximum value of each account (in the currency

of that account) during the calendar year being reported. The maximum

value of an account is a reasonable approximation of the greatest value

of currency or non monetary assets in the account during the calendar

year. Periodic account statements may be relied on to determine the

maximum value of the account, provided that the statements fairly

reflect the maximum account value during the calendar year. For Item

15, if the filer had a financial interest in more than one account, each

account must be valued separately

 

So you should go through the account statements and provide the maximum balance for the 12 month period. You don't have to do a valuation for each day or an average over the year.

Dave CPA, Accountant
Category: Tax
Satisfied Customers: 840
Experience: Vast knowledge within the accounting/tax industry
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