This article is part of TokenTax's Cryptocurrency Tax Guide.
Getting started filing the FinCEN Form 114 - Foreign Bank Account Report (FBAR) for International Exchanges
You are required to file a report of foreign bank and financial accounts with holdings greater than USD 10,000 in total separate from your tax return.
First of all, you will need to calculate your maximum amount held in foreign financial institution accounts at any given time throughout the previous tax year. If you already have your maximum account balances for accounts greater than USD 10,000 at any time, you can skip to the section about the FinCEN website.
To calculate your maximum balance, you need to organize your account balances by each exchange you traded on throughout the previous calendar year. You then need to convert each exchange balance into USD and aggregate the total amount at any given time during the calendar year. If you have multiple foreign accounts and only one is above USD 10,000, each account still needs to be filed separately.
Using crypto tax software to organize your transactions
It may be helpful to use crypto tax software to aggregate and organize all your accounts if you have traded on multiple exchanges. Also, crypto tax software with a price index may be useful if you have traded multiple cryptocurrencies and need to aggregate totals.
TokenTax automatically generates a report that tells you the highest value of the year in USD. If you are already a Basic or Premium user and need to purchase the FBAR add-on, you can do so at the checkout page. Be sure that you've uploaded all your crypto data, including deposits and withdrawals for all exchanges. You can then generate the FBAR form in your Documents page.
Filing on FinCEN's website
Individuals can use the Bank Secrecy Act (BSA) e-filing system to report their FBAR here on the Financial Crimes Enforcement Network (FinCEN) webpage before the April 15 due date. Most of our clients elect to use this system which can be completed within your web browser.
In Part I, you begin by filling out your personal information as a United States Green Card holder or citizen living abroad or in the U.S.
Parts II or III are for filling out the information of foreign exchanges you held crypto in. If you are a single filer, then fill out Part II. If you are completing the FBAR for jointly held accounts where both individuals have signature authority, then use Part III.
In part II / III, you can create multiple copies of the form by clicking the + box at the top of the form to create multiple entries for multiple exchanges.
Entering your exchange information
For each exchange, here's how we fill typically fill out the FBAR:
The maximum account value is from the top row of the FBAR report that TokenTax generates.
For "Type of account," select "Other" and then in the box to the right, type in "Cryptocurrency exchange."
"Financial institution name" is the name of the exchange.
"Account number or other designation" can be the email address used for the exchange login.
For the address, fill it out to the best of your ability. Some exchanges have their addresses findable via Google, while others keep their address secret for security reasons. At minimum, the exchange's country should be entered. You can find a list of popular foreign exchanges' countries below.
The final parts, IV and V, are typically left blank. Finally, add your signature to the document and submit.
Consult FinCEN’s instructions, a CPA or an enrolled agent for more support on filing the FBAR.