How to determine the maximum account value for FBAR
The FBAR maximum account value is the highest balance in each foreign financial account at any point during the calendar year – not the December 31 closing balance – converted to USD using the Treasury Reporting Rates of Exchange for December 31 of that year.
This 2026 FBAR article will cover a step–by–step method to calculate the maximum account value for FBAR, including details on currency conversion, IRS Report of Foreign Bank and Financial Accounts (FBAR), handling unknown balances, transfers between accounts, and special cases.
See our guide to FBAR filing requirements and 2026 deadlines.
What is the maximum account value for FBAR?
The maximum account value for FBAR purposes is the greatest value of currency or non–monetary assets in the account at any single point during the calendar year – not the closing balance on December 31 (FinCEN, Reporting Maximum Account Value).
If the aggregate of maximum account values across all foreign accounts exceeds $10,000 at any time during the calendar year, the account holder must file FinCEN Form 114.
You can find a full explanation in our guide to FinCEN Form 114 (FBAR) filing instructions and due dates.
How to determine the FBAR maximum account value
FinCEN requires a two-step process to determine the FBAR maximum account value:
- Identify the highest balance in the account's native currency at any point during the calendar year;
- Convert that balance to USD using the Treasury Reporting Rates of Exchange for December 31 of the reporting maximum account value year.
This section will guide you through identifying the peak balance and converting it into USD.
Step 1 – Identify the peak balance
The peak balance is the highest value of funds or assets in the account at any single moment during the calendar year. Periodic account statements can be used to determine this value, provided the statements fairly reflect the maximum account value during the year (FinCEN Form 114 instructions).
For accounts denominated in USD, the peak balance is the maximum USD figure on record – no currency conversion is required.
Step 2 – Convert to USD using the December 31 Treasury rate
Convert the peak balance to USD using the Treasury Reporting Rates of Exchange published for December 31 of the reporting year – not the exchange rate on the date when the peak balance occurred.
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EUR example: Based on our TFX client scenario, a US citizen held a French bank account that reached a peak balance of €12,000 in July 2025. The Treasury's December 31, 2025, rate for EUR was $1.10 per euro.
The FBAR maximum account value reported on FinCEN Form 114 is $13,200 (rounded up to the next whole dollar per FinCEN rules). - INR example: A US permanent resident held an Indian bank account that reached a peak balance of ₹850,000 in March 2025. The Treasury December 31, 2025, rate for INR was $0.012 per rupee. The FBAR maximum account value reported is $10,200.
If no Treasury rate is available for the currency, use any verifiable exchange rate and document the source in your records (FinCEN Form 114 instructions).
What if the maximum account value is unknown?
If the FBAR maximum account value is unknown, this means it cannot be determined. FinCEN Form 114 Item 15a includes an ‘amount unknown checkbox’ – check it and complete all other required account fields.
- The overestimate approach – reporting the highest balance that could reasonably have existed based on available information – is an accepted good–faith compliance position when account statements are unavailable.
- An empty Item 15 field is not equivalent to a checked "amount unknown" box and does not establish a good–faith disclosure record.
Transfers between accounts – how double counting works
When funds are transferred between two foreign accounts, both accounts report their independent peak balances on the FBAR – the transferred amount is counted separately in each account, not netted.
- Remember – FBAR is purely an informational form, and there is no tax assessed on the amounts reported. Therefore, reporting the transferred funds twice does not have any financial consequences. Think of it from a different angle – there is no financial benefit to reporting a low account value, and to do so would actually be a violation of the law.
The point of the FBAR is simply to report the actual highest value during the year. - Failure to properly report eligible accounts can lead to FBAR penalties. The IRS and Treasury retain the right to impose penalties for willful violations. The ceiling for penalties is the greater of $165,353 or 50% of the balance in the account at the time of the violation (Bittner v. United States, 2023).
Based on our TFX client scenario: A US person transfers $8,000 from Account A (French bank) to Account B (German bank) in March. Account A reached its peak balance of $12,000 in January, before the transfer. Account B reached its peak of $9,000 in April, after receiving the funds. The FBAR reports $12,000 for Account A and $9,000 for Account B – a combined reported figure of $21,000, even though no more than $12,000 existed at any single moment.
This scenario is important when reviewing the Schedule B question on Form 1040 regarding willful blindness – properly reporting maximum values can help avoid penalties.
Although your FBAR is filed outside of your tax return and sent to the Treasury, your tax return (in particular, Schedule B) may be used to help determine willfulness.
The instructions of Schedule B provide guidance on the taxpayer's responsibility to report non–US financial accounts and discuss the duty to file FBAR.
- These resources give ammunition to the IRS in proving that the taxpayer could have learned of the filing requirements of FBAR. The IRS’s position is that it is a reasonable assumption that if you have non–US bank accounts, you should read the information provided by the government on tax forms.
- On a standalone basis, it may be difficult for the government assessor to assess penalties for one infraction. However, failure to learn of filing requirements, coupled with efforts to conceal the accounts, may lead to the conclusion that the violation was (blindly) willful. Simply checking the wrong box or no box on Schedule B is not sufficient.
As described in this article, the biggest infractions come from failure to accurately report (and/or conceal) non–US financial accounts. Always report the highest balance in the account throughout the year, even if it was only for a short time period due to movement between accounts.
Special cases
Four account situations require specific treatment when determining the FBAR maximum account value – each has a FinCEN–prescribed rule that overrides the general peak balance approach.
The following table covers the four most common special cases and the correct reporting treatment for each, per FinCEN Form 114 instructions:
| Situation | What to report | Authority |
|---|---|---|
| Negative balance | $0 – not a negative number | FinCEN Form 114 instructions, Item 15 |
| Joint account | Full balance reported independently by each US–person owner – not a proportional share | FinCEN Form 114 instructions + See: How to file FBAR for jointly held foreign accounts |
| Signature authority only, no financial interest | Full peak balance using same two–step method | FinCEN Form 114 instructions |
| Account with unknown balance | Best estimate or $0 + Item 15a checkbox | FinCEN Form 114, Item 15a |
Common mistakes when reporting the FBAR maximum account value
Five specific errors account for the majority of FBAR maximum account value misreporting – each has a defined correct alternative per FinCEN guidance.
The following 5 mistakes cause the FBAR maximum account value to be incorrectly calculated or reported:
- Using the December 31 year-end balance instead of the highest balance at any point during the year.
- Applying the exchange rate from the date the peak balance occurred instead of the December 31 Treasury rate.
- Netting transfers – treating a transfer from Account A to Account B as canceling out, rather than reporting each account's independent peak balance.
- Leaving Item 15 blank when the value is unknown instead of checking Item 15a "amount unknown."
- Rounding down instead of up – FinCEN requires rounding to the next whole dollar, not to the nearest dollar.
Penalties NOTE!
Failure to report foreign accounts or reporting an incorrect maximum account value can trigger FBAR penalties.
For 2026, non–willful violations carry a penalty of up to $16,536 per FBAR filing per year – calculated per form following Bittner v. United States (2023). Willful violations carry the greater of $165,353 or 50% of the unreported account balance per account per year (31 U.S.C. § 5321).
See: FBAR penalties in 2026 – willful and non–willful amounts, relief options.
If you filed your FBAR before the deadline, don’t worry. If you have questions, please get expert help using our FBAR filing services. At Taxes for Expats, we have experience working with United States taxpayers throughout the world.
FAQ
The following 8 questions address the most common points of confusion when determining and reporting the FBAR maximum account value.
The FBAR maximum account value is the highest balance in each foreign financial account at any point during the calendar year, converted to USD using the Treasury rate as of December 31 (FinCEN Form 114 instructions).
The FBAR maximum account value must reflect the highest balance during the year, not the year–end balance.
Use the Treasury Reporting Rates of Exchange for December 31 of the reporting year for currency conversion. If unavailable, use any verifiable rate and document it (FinCEN Form 114 instructions).
Check the "amount unknown" box on FinCEN Form 114 and provide the best estimate of the balance.
Transfers between your foreign accounts do not reduce the total FBAR exposure. Each account reports its independent peak balance.
Report $0 for an account with a negative balance, not a negative amount (FinCEN Form 114 instructions).
Yes, each spouse reports the full balance of a jointly held foreign account, not a proportional share.
See: How to file FBAR for jointly held foreign accounts.
No, the thresholds for FBAR and Form 8938 (FATCA) differ.
