Phil Hodgen stands high among the few tax/law “professionals” in the U.S. expatriation sector that I have respect for. Hodgen has just shared this precious pearl:
The real risk is uncertainty and fear.
If you wish, go on to read the whole classic answer that is distilled into this pure nacre.
The coda, also a quotation: In the long run everyone pays the price. Sauve qui peut.
@Duke of Devon and/or anyone else
Do you think a case can be made for using a different exchange rate? I’m thinking either year average rate published by the IRS, or the Dec 31 rate that one is supposed to use for FBARs (and I believe is published by Dept of Treasury).
8854 instructions say to use the value of your stuff on the day you expatriate (or is it the day before?). But I wonder if that necessitates using the exchange rate of that day. It would be logical to assume so, but the way that FBAR accounts are supposed to be dealt with throws logic out the window.
[BTW, barring anything to the contrary, I’d say that using the exchange rate of the valuation day is the safest thing to do. And, it seems unlikely to make much difference in either case as long as you’re below the magical $2 million threshold. This is just something I’ve been wondering about]
tdott. Logical and safe. Who can ask for more? Bank of Canada publishes daily, monthly and annual rates.
Thanks, Duke of Devon. I appreciate your wisdom. I must ask, though, on what you base it. I mean, it’s what I wanted to hear, but I haven’t been able to find any “official” rules or instructions about it.
Graham Vapors. The instructions for Form 8854 specifically state that you value your property on the date of expatriation . They also specifically state you don’t need an appraisal. In other words use a reasonable value. Many have used the assessed value. The value in US$ is the value on that day multiplied by the exchange rate on that day. Nothing else is reasonable.
You need to also use a retail exchange rate not a wholesale rate meaning what you can actually get.
George. Not so. You use an official rate. Bank of Canada published rates will do just fine.
Graham Vapors –
My approach was to use Bank of Canada rate for the particular day. Three different specialists viewed what I did and said nary a nay. So wowsie looky. I just lined up with the Duke. There’s an example of what can happen when the sauve qui peut principle comes into play. A big batch of Brock-oli stew is another!
Duke of Devon and usxcanada, please accept my heartfelt thanks. This info is much appreciated!