You are required to file an FBAR if the aggregate value of your foreign accounts exceeds $10,000 at any time during the year. To determine the aggregate value of your foreign accounts, you must first determine the maximum value of each account separately, including accounts that were opened or closed during the year.
For example: the maximum value of foreign account 1 is $4,000, and the maximum value of foreign account 2 is $5,000. During the year, you close account 1, and transfer the balance to account 3, which is a new account. As a result, the maximum value of account 3 during the year is also $4,000. The aggregate value of all your foreign financial accounts (foreign account 1, 2, and 3) is $13,000 ($4,000 for account 1, $5,000 for account 2, and $4,000 for account 3). This means that you must file an FBAR to report all 3 accounts.
Using the same example, but instead of opening a new account, you simply close account 1 and transfer the balance to account 2. The aggregate value still is $13,000 ($4,000 for account 1 and $9,000 for account 2. Therefore, you must file an FBAR and report both accounts.
It might seem that you are overreporting your foreign financial assets because you’re double-counting the same assets. However, the FBAR is for information reporting purposes only. No tax is due with the form. If your foreign assets exceed a certain threshold, you may be required to file Form 8938 with you federal tax return.
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