To those of you who done the FBAR, what price are you suppose to use for the highest balance of bitcoin or any crypto? Thus say you use binance or electrum and kept btc there and had enough btc where you had at least 10k during the year and at end of year, what is the highest balance you are suppose to use? Take the highest amount of btc you held in binance or electrum and go to coinmarketcap and look for the highest closing balance? Or at the end of the year? Thus if you had 2 btc, well your balance at end of year would be like 14100 x = 28200. But it went up to 19200 at one point. So is it 19200 x 2 = 38600?
Anyone who filed FBAR could explain?
Also they need your account number. What account number are you giving for a wallet like electrum? There is no email or account number associated with it as oppose to if you use an exchange like say binance. Also are nano ledger s or trezor foreign?
There's a lot of contradictory information out there regarding FBARs and Bitcoin. The IRS continues to avoid issuing official guidance and practitioners disagree on the law's application to cryptocurrency and cryptocurrency exchange accounts.
One thing that's for sure is
the FBAR is only for financial accounts. It doesn't extend to your Electrum wallet, or any other cryptocurrency wallet --
On June 4, Rod Lundquist, a senior program analyst for the Small Business/Self-Employed Division, confirmed that, for FBAR purposes, Bitcoin is not reportable "...not at this time." He followed up by saying that "FinCEN has said that virtually currency is not going to be reportable on the FBAR, at least for this filing season."
But there's more ambiguity with regard to the FBAR and foreign exchanges.
Here's one perspective:
But there is some uncertainty among tax professionals about whether cryptocurrency investors who buy off foreign exchanges need to go through these additional foreign account reporting measures.
"There probably is an FBAR requirement, but I wouldn't go as far as to say there always is one," said Kevin F. Sweeney, a former federal tax prosecutor and an attorney at Chamberlain Hrdlicka in Philadelphia.
He said a lack of guidance from the government has left a "black hole" in his analysis.
"It would seem awfully unfair if they would expect taxpayers to know that — and to then issue penalties for taxpayers who didn't do that — when practitioners can't even 100 percent figure out if there's an FBAR requirement," he said.
Here's another:
In response to my query earlier today regarding disclosure, IRS issued this statement: The Financial Crimes Enforcement Network, which issues regulatory guidance pertaining to Reports of Foreign Bank and Financial Accounts (FBARs), is not requiring that digital (or virtual) currency accounts be reported on an FBAR at this time but may consider requiring such accounts to be reported in the future. No additional guidance is available at this time.
If you do decide to report your holdings on an FBAR, then for maximum account value, they want the highest value at any point in the year. You need to convert each balance to USD to determine that. The maximum account value isn't necessarily the highest amount of BTC you had at any one time, though it might be.
Here is the IRS guidance:
Maximum Account Value
Step 1. 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 nonmonetary 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.
Step 2. In the case of non-United States currency, convert the maximum account value for each account into United States dollars. Convert foreign currency by using the Treasury's Financial Management Service rate (
http://www.fiscal.treasury.gov/fsreports/rpt/treasRptRateExch/treasRptRateExch_home.htm) for the last day of the calendar year. If no Treasury Financial Management Service rate is available, use another verifiable exchange rate and provide the source of that rate.
