Fbar and Mortgage Credit/debit passing through account

Hello Everyone!


What a great forum.  I wish I had found it years ago!!!

I have lived in the UK for quite awhile now and have been doing my taxes every year.  I thought I was doing them correctly but I just got a letter from my bank, which lead me to looking online, which is why I now know I haven't been doing my taxes correctly. 

So I just learned about the Fbar and Schedule B.

My question is about the mortgage credit that goes in and out of our checking account on the day or couple of days a house purchase is made. 

I will provide an example where £15,000 is the highest amount for the rest of the year:

Current Account Balance:

May 10                                                                    £15,000
May 11       Mortgage credit from bank £100,000        £115,000
May 11       Pay Seller (through solicitor) £100,000       £15,000

Would I need to report £115,000 as the highest amount in my account even though it was a loan that passed immediately through the account to buy a house?  Or would I report £15,000 as the highest amount? 

What if the loan amount was in the account for 1 or 2 days while all of the completion details were sorted out?

I hope that makes sense and thanks so much for help on this!!

My understanding is that you give the highest balance of the year for each account, no matter when it occurred or for how long.

When I was asking this forum for clarification about this last year, an example of having, say $6k in an account, then opening a new account and transferring that $6k to it... the highest balance in each of those accounts would be $6k, for a combined reportable total of $12k, even though I only ever had $6k to my name.  FBAR can make you appear much wealthier than you really are. 

I agree. In the OP's example the account maximum is over $10k, so is reportable under FBAR. The exchange rate to use is here:
https://www.fiscal.treasury.gov/fsreports/rpt/treasRptRateExch/currentRates.htm
Use the exchange rate for 31st December of the year you are reporting.

FBAR reporting is not part of your tax reporting. It is a separate on-line report here:
https://bsaefiling.fincen.treas.gov/NoRegFBARFiler.html.

Note also the reference to Deliquent FBAR Submission procedures towards the bottom of this page:
https://www.irs.gov/businesses/small-businesses-self-employed/report-of-foreign-bank-and-financial-accounts-fbar

You may also need to consider whether you need to complete a Form 8938, which is part of your tax return.

Hello Everyone!


What a great forum.  I wish I had found it years ago!!!

I have lived in the UK for quite awhile now and have been doing my taxes every year.  I thought I was doing them correctly but I just got a letter from my bank, which lead me to looking online, which is why I now know I haven't been doing my taxes correctly. 

So I just learned about the Fbar and Schedule B.

My question is about the mortgage credit that goes in and out of our checking account on the day or couple of days a house purchase is made. 

I will provide an example where £15,000 is the highest amount for the rest of the year:

Current Account Balance:

May 10                                                                    £15,000
May 11       Mortgage credit from bank £100,000        £115,000
May 11       Pay Seller (through solicitor) £100,000       £15,000

Would I need to report £115,000 as the highest amount in my account even though it was a loan that passed immediately through the account to buy a house?  Or would I report £15,000 as the highest amount? 

What if the loan amount was in the account for 1 or 2 days while all of the completion details were sorted out?

I hope that makes sense and thanks so much for help on this!!

For my FBAR I look at my monthly statements which has the balance of every day and I report the highest balance noted at the end of the day for the whole year. I don't bother with daily fluctuations that I happen to know about because I doubt very much if the bank reports that level of detail to the US government because they don't report that level of detail to me. When I look at my statements they list the payments and deposits but don't have time stamps against the entries or time stamped balances except for the closing balance each day.  You can put £115,000 on your FBAR as it is reporting only and may help you sleep better.

In your example above you would need to file an FBAR anyway because your highest balance is over $10,000 but would not have to file any FATCA forms (8938) with your tax return because you are below the reporting limits.  On your US tax return you just need to report any interest from those foreign accounts on Schedule B.

https://www.irs.gov/businesses/corporations/summary-of-fatca-reporting-for-us-taxpayers

Taxpayers living abroad. You must file a Form 8938 if you must file an income tax return and:

You are married filing a joint income tax return and the total value of your specified foreign financial assets is more than $400,000 on the last day of the tax year or more than $600,000 at any time during the year. These thresholds apply even if only one spouse resides abroad. Married individuals who file a joint income tax return for the tax year will file a single Form 8938 that reports all of the specified foreign financial assets in which either spouse has an interest.
You are not a married person filing a joint income tax return and the total value of your specified foreign financial assets is more than $200,000 on the last day of the tax year or more than $300,000 at any time during the year.

I forgot to add that last year we bought a house and the money passing through our accounts to the solicitor went from savings accounts to checking and then to the solicitor over a couple of days. Unfortunately this meant that the highest balances of our savings accounts added to the highest balance of our checking account put us over the limit for FATCA reporting so for the first time ever we had to include forms 8938 in our IRS tax return even though we never actually had that much money but were just moving it around.

Thanks very much everyone for helping to clarify this issue.  All of the comments have been incredibly useful. 

FYI - Due to TSB's online banking woes I can't access any information about my account for more than 18  months ago.  I went in to the branch and neither can they!  The branch has sent a request.  What do I do if TSB has lost all of my account data prior to November 2016?

One more question if I may...

Do I need to report a credit card on the Fbar? 

Thanks thanks thanks again.

If you are unable to get records from TSB (wow!), and have no records of your own, all you can do is make best estimates.

Credit cards are not reported.

If you are unable to get records from TSB (wow!), and have no records of your own, all you can do is make best estimates.

Credit cards are not reported.

+1

Your estimates are going to be better than TSB’s lack of data.

Thanks Anchor and durhamland,

Good to know about the credit card.

Yes, I hope TSB sorts themselves out.  They said it would take 3-5 days for the data to reach the branch at which point the branch can print out the summary for me.  To me, the fact that the branch was unable to access the data was not a good sign.  Anyway, it is hard to believe that the data is actually lost.  I'm sure it will turn up.

Unfortunately, I signed up for paperless statements...so I have no hard copies. 

Yes, I hope TSB sorts themselves out.

Me too! I waited over 30 minutes to try to get through to them on the phone today before I gave up!