Do I have to put my crypto exchange account on an FBAR?
It depends on the year, which is unsatisfying but correct. Whether a foreign account holding crypto is a foreign financial account for account-reporting purposes has been treated differently over time, so the position for one year is not automatically the position for another. Work through it year by year against what applied to that year, and write down the conclusion and the reason. Where the account also held ordinary currency, that part of the balance can bring the account into the report regardless of how the tokens are characterised. And the asset report is a separate question again.
Is the FBAR filed with my tax return?
No. It goes to FinCEN rather than being attached to the return, so it has its own filing channel, and a return prepared and filed correctly tells you nothing about whether the account report was dealt with. In practice that separation is how the obligation gets overlooked: the person preparing the return may never see the account, and the person watching the account may not know a report exists. Treat it as its own item on the list for each year, with its own evidence of filing retained alongside the return papers.
Does the FBAR answer change depending on the year?
It can, and that is the most useful thing to understand about this question. The treatment of foreign accounts holding crypto has moved over time, so a taxpayer with the same account at the same platform across several years may have a different answer for different years. Do not settle it once and apply that conclusion backwards. Take each year separately, against what applied to it, and keep a note of the position and the reason. If a year is later examined, a note made at the time is what shows a considered position was taken rather than an assumption.
What is the difference between the account report and the asset report?
They are aimed at different things. The account report covers foreign financial accounts, so it asks who holds the account and where. The asset report, Form 8938, covers specified foreign financial assets, which is a wider and differently drawn category. A crypto holding can fall inside one and outside the other, and the tests are applied separately rather than one following from the other. Answering only the more familiar question leaves half the analysis undone. Work both, for each year, and record each conclusion with the facts it rested on.
Should I file an FBAR anyway if I am unsure?
Protective filing is a real option and often worth weighing where the characterisation is genuinely open, because a report that turns out not to have been required is a different kind of problem from a missing one. It is not automatic. File, and you have made a statement about the account that should sit consistently with the position taken elsewhere in the file. Decide it deliberately, note why, and keep the reasoning with that year's papers so the same logic can be applied to the years that follow.
Which accounts count towards the FBAR reporting threshold?
The test looks across all your foreign financial accounts together rather than at any single one, and it uses the highest value each reached during the year rather than the balance on the closing day. Two consequences follow. Small accounts matter, because they are added in. And an account closed mid-year still counts for the period it existed, at its high point. So what you need is a highest value for each account for each year, in one schedule, which is also the hardest thing to rebuild once the platform has gone.
What is a foreign trust for US tax purposes?
A trust that is not a domestic trust — broadly, one that fails the tests looking at whether a US court can exercise primary supervision and whether US persons control the substantial decisions. The classification decides everything downstream: whether the settlor is taxed on the income as owner, how distributions to US beneficiaries are taxed, and which annual information returns are due. Many ordinary foreign arrangements, including some pension and education savings vehicles, land inside the definition. See Form 3520-A.
Do I pay US tax on an inheritance from abroad?
A bequest is not income, so the receipt itself is not taxed. Reporting is a different matter: a US person who receives large gifts or bequests from a foreign person or estate files an information return for the year, and inheriting a foreign account or an interest in a foreign trust brings the account and asset reports with it. The penalties here attach to the information return, not to tax — which is why people who owed nothing still get letters. See Form 3520.
