I am a visiting scholar in the US and this year (for the tax year 2021) I had to file for the first time as a resident for federal tax purposes.
That also means that I have to submit an FBAR report and I have problems completing it.
My "real" foreign bank accounts are easy to report because the FBAR forms have been made for them. However, I am clueless when it comes to accounts that don't fit the norm, such as the Wise/Transferwise Borderless account (https://wise.com), the cryptocurrency exchange market kraken.com, or "other" accounts.
Wise/Transferwise Borderless account
Wise (formerly Transferwise) started as an international money transfer service. In recent years, they introduced the Borderless account, which is an awesome service for international people: You receive a debit card and you can hold multiple currencies on this account and always pay with the right currency. Adding a new currency only takes a click. In addition to that, you also receive local bank account details in the country of the currency, which allows you to receive money from other people in that country. However, this does not apply to all currencies. For instance, if you hold currency in CHF, you don't get Swiss bank account details, but if you add EUR or USD, you receive bank details in Brussels and NYC, respectively.
So this one Borderless account gets local bank account details in several countries for every currency.
As for every regular bank account, you can print statements:
The statement for my USD account shows the following address:
Wise Europe SA, Avenue Louise 54/S52, Brussels, 1050, Belgium
However, the account and routing numbers for receiving USD from inside the US is:
Evolve Bank & Trust, 19 W 24th Street, New York, 10010, USA
And for receiving money on this account from outside the US, is:
Community Federal Savings Bank, 89-16 Jamaica Avenue, Woodhaven, NY, 11421, USA .
Both have their own and different account number that is linked to my Wise/Transferwise Borderless account.
(1) ---> So which account number, bank, and bank address do I have to report?
The statement for my GBP account shows again the Belgian address in the header,
but the bank account details are with:
TransferWise, 56 Shoreditch High Street, London, E1, 6JJ, United Kingdom
(2) ---> Which address do I have to report?
(The statement for my EUR account shows again the Belgian address in the header and here (finally) the bank address connected to the bank details is the same as in the header)
The statement for my CHF account shows again the Belgian address in the header, but this "account" neither has a bank account number, nor a bank address in Switzerland.
(3) ---> How shall I report this one?
(4) ---> Or should I convert the highest value in each currency in the year to USD and then report the sum together with the Belgian address or report everything separately?
(5) ---> If I report everything together and use my Transferwise account username (my email address) and someone stumbles over the other account data, am I then going to be fined?
There were cases where I converted money from one currency to another (the main purpose of this account). If I report the highest value in each currency, then convert it to USD, and then sum up (or report individually), this will virtually double the amount of money that I would have to report, although I only had half that much.
(6) ---> Is it supposed to be like that?
I contacted the Transferwise support and they were not very helpful. They don't know FBAR and they might also not care about it. It is just not their responsibility .
I assume there must be thousands of US persons that are Wise/Transferwise customers. How are they doing the FBAR reporting? There is another thread in this forum about Transferwise, but it only dealt with whether you have to report it and not how.
Cryptocurrency exchange (kraken.com)
I always thought kraken.com would be located in SF . good that I contacted them. Since I opened the account before I came to the US and charged the account with EUR, my account is actually in London, UK. It depends on where you opened it and with which currency.
First I thought that I only have to report the cash (EUR) amount on this account, but now after I asked my tax advisor, I was told that I also have to report the cryptocurrency in this account.
(7) ---> How shall I report this?
(7.1) ---> Do I have to take the highest amount in every cryptocurrency that I was holding during the year, convert it to USD with the exchange rate on 12/31/2022, and sum it up?
Cryptocurrencies are not in the "Treasury Reporting Rates of Exchange" list and the rates were not fixed on 12/31/2022, they fluctuate!
(7.2) ---> How do I have to convert this?
If I want to buy cryptocurrency, I first have to transfer cash to the account (like a brokerage account ). If I use that cash to buy crypto, I am in the same situation as above: I have to report twice the amount of money that I actually had. That doesn't sound right (---> see (5)).
(8) ---> How would you report a foreign brokerage account? (I guess this is a similar situation)
(9) ---> Not that I would use/have that, but how about google or apple pay etc . ? (That also exists in other countries.)
My visit to the US is almost over and I will leave this year. That means that my residence status for tax purposes will change.
I will definitively open new non-US bank accounts this year.
(10) ---> If I open them after I left, do I have to report them?
(It would be still the same tax year and I will likely transfer all my US money to these accounts. So all my non-reportable money in the US will become foreign money)
I am a bit scared of doing something wrong and being charged $100k or 50% have of all my savings.