I have a question regarding what the "maximum value of an account" means per FBAR requirement. I share a checking account with my non-American husband. My husband's salary gets deposited to the account, and debts are paid from the account. The account lists all transactions, summarizes the balance on a daily, and monthly basis. Is the "maximum value" the maximum transaction (debit or credit), the maximum daily balance, or the maximum monthly balance?

For example: We have 2K in the account. My husband deposits his salary of 5K. On the same day, he pays bills worth 6K. The daily balance is 1K. At the end of the month, the bank statement shows a balance of 3K. What is the "maximum value of the account" per FBAR requirements?

The MAX value is the maximum value at ANY point in time in the calendar year.

In your example, the max value would be $7,000, well below the $10K threshold. However, if he got paid a $5,000 bonus on top of his $5,000 salary, and BOTH were depoisted at the same time, the max value would be $12,000, and the FBAR WOULD be required.

It is an INFORMATION return only; no taxes are due with the FBAR.

Thank you so much for your reply.

I understand that while this return is information only, I also believe that the maximum value is used to calculate penalties, which makes the definition of "maximum value" matter when you are in delinquent FBAR hell (as I am in).

I also have a concern about double counting: in 2008, my husband and I had an account with $20K, we moved the money mid-year to a new account. My understanding is that I need to report both account's maximum value, which would be double-counting the $20K. Is there any way to reconcile this?

You WILL have to double count, but do NOT stress on the penalties. The FBAR is not targeted at accounts like your account. It is targeted at multi-million $ accounts that were set up by wealthy Americans trying to evade U.S. income taxes.

Submit the past-due FBARs with a cover letter requesting waiver of all penalties, and you are practically GUARANTEED to get the waiver.

Thank you, you've made me feel A lot better!

Glad to help!