3
▪ Commonwealth of Puerto Rico
▪ U.S. Virgin Islands
▪ Trust Territory of the Pacific Islands
• Indian lands as defined in the Indian Gaming Regulatory Act.
Example: An account maintained with a branch of a U.S. bank physically located in
Germany is a foreign financial account.
Example: An account maintained with a branch of a French bank physically located
in Texas isn’t a foreign financial account.
Example: Ed, a U.S. citizen, purchased securities of a French company through a
securities broker located in New York. Ed doesn’t need to report these securities
because he purchased the securities through a financial institution located in the U.S.
Maximum Account Value
The maximum value of an account is a reasonable approximation of the greatest
value of currency and non-monetary assets in the account during the calendar
year. U.S. persons may rely on periodic account statements issued at least
quarterly to determine the maximum value of the account if the statements fairly
reflect the maximum account value during the calendar year. To determine the
maximum value of a foreign financial account, first determine the maximum
account value in the currency of the account. Then, convert the maximum
account value for each account into U.S. dollars using the exchange rate on
the last day of the calendar year.
Example: A foreign financial account located in Japan would typically be valued in
yen. Determine the maximum value of the account in yen. Next, convert the maximum
value of the account into U.S. dollars.
When converting between a foreign currency and U.S. dollars, use the Treasury
Reporting Rates of Exchange for the last day of the calendar year. If no
Treasury Financial Management Service rate is available, use another verifiable
exchange rate and give the source of that rate. In valuing currency of a country
that uses multiple exchange rates, use the rate that would apply if the currency in
the account were converted into U.S. dollars on the last day of the calendar year.
Example: Craig, a U.S. person, owns foreign financial accounts X, Y, and Z with
maximum account values of $100, $12,000 and $3,000, respectively. Craig must file
an FBAR because the aggregate value of the accounts is $15,100. Craig must report
foreign financial accounts X, Y, and Z on the FBAR even though accounts X and Z
have maximum account values below $10,000.
Example: Kristin, a U.S. person, owns foreign financial accounts A, B and C with
account balances of $3,000, $1,000 and $8,000, respectively. Kristin must report
accounts A, B and C because the aggregate value of the accounts is over $10,000.
It doesn’t matter that no single account exceeded $10,000.
Example: Diane, a U.S. person, owns a foreign financial account with a maximum
value of $15,000, but the account doesn’t produce income. Diane must file an FBAR
to report the account. Whether or not an account produces income doesn’t affect
the requirement to file an FBAR.
Financial Interest
A U.S. person has a financial interest in the following situations:
1. The U.S. person is the owner of record or holder of legal title, regardless
of whether the account is maintained for benefit of the U.S. person or for