What is the aggregate balance test for FBAR?

The aggregate balance test for FBAR determines whether you have a filing obligation by looking at the combined maximum values of all your foreign financial accounts during the calendar year. If the aggregate value exceeds $10,000 at any time during the year, you must file an FBAR reporting all foreign accounts — not just the ones that pushed you over the threshold.

To calculate your aggregate balance, take the maximum value that each foreign account reached during the year and add them together. It is important to note that the maximum values for different accounts do not need to occur on the same day. Account A might have peaked at $6,000 in January while Account B peaked at $5,000 in August — the aggregate of $11,000 exceeds the threshold even though no more than $6,000 was in any single account at any given time.

For foreign currency accounts, convert the maximum balance to US dollars using the Treasury Reporting Rate of Exchange for the last day of the calendar year. These rates are published on the Treasury Department's Financial Management Service website. Use the year-end rate even though you are reporting the maximum value during the year.

Some practical tips for applying the aggregate balance test: include all accounts in which you have a financial interest or signature authority; include joint accounts at their full value, not your proportional share; include accounts that were opened and closed during the year; include accounts even if they generated no income; and remember that temporary spikes (such as from incoming wire transfers) count toward the maximum balance.

If you are close to the $10,000 threshold, pay particular attention to exchange rate fluctuations, which can push your aggregate above or below the threshold. Keep monthly records of account balances to accurately determine your maximum values at year-end.

Once you determine that the aggregate exceeds $10,000, you must report every foreign account you have, including those with small balances. There is no minimum per-account threshold for reporting once the aggregate test is met.