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Foreign Savings Accounts-------Treasury Form 90-22-1

My wife and I are residents of California and U.S. citizens. She has dual citizenship, New Zealand and U.S.A. We have a joint savings account in New Zealand which is inheritance from her family. The amount is substantial and over $10,000 USD. I have reported the

2007 interest paid to the account as well as the Non Resident With Holding Tax payed to the NZ government on Turbo Tax. My question is--------do I use USD amounts by converting NZD dollars, or do I use NZD amounts and the IRS does the conversion?
Reply to
Lon
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You should report the income on US tax forms in US dollars. To convert the income from NZD to USD you have the option of using an average exchange rate for 2007, which the IRS can provide to you. Or, you can use the exchange rates that were in effect on the individual days that you received interest payments into the account, and calculate each payment's conversion separately.

Reply to
sgallagher

What is the website for the average exchange rate?

For daily exchange rates I use , and "Typical cash rate: +4%".

Reply to
removeps-groups

For anyone who's interested, I found . At the bottom are several links, and one of them is the one I mention below.

But the government website does not look correct because they use the interbank rate. Consider an example. The treasury department website at

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says the exchange rate for USDollar to South African rand is

12/31/2007 6.85470000

However, the website oanda.com says the conversion on 12/31 is

6.85470000 only if you use the interbank rate.

But any person who moves money around would probably get the typical cash rate, which is the interbank rate plus 4%, in which case the exchange rate would be 7.12888.

Do they publish any guidance on which exchange rate to use?

Reply to
removeps-groups

snip

Many of the tax returns I prepare for clients involve foreign earnings which must be translated to dollars. For several years, I have used the rates published by the Federal Reserve --

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which is posted annually. The US Embassy in Bangkok posts this list as guidance for Americans in Thailand.

Since this is a rate published for use by government agencies to use in official accounting documents, it should satisfy your needs.

Lanny K. Williams, CPA Nawarat, Williams & Co., Ltd. Income Tax Services for Expatriate Americans

Reply to
L K Williams

--www.federalreserve.gov/release/G5a/Current/which is posted annually.

Your URL

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is not working.

Reply to
removeps-groups

He left out an s. Try this one:

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Reply to
Bruce E. Cobern

--www.federalreserve.gov/release/G5a/Current/which is posted annually.

The FRB spot exchange rates for NZ are at:

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Reply to
Alan

at:

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There is some discrepancy between the various websites quoted in this thread:

Website =

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= VERSION 0 -- NEW ZEALAND -- SPOT EXCHANGE RATE, $US/NZ$31-Dec-07 0.7678 Website =
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= Treasury Reporting Rates of Exchange as of December 31,2007 NEW ZEALAND - DOLLAR 1.3030 Inverse of the above is 0.76745970836531082118188795088258

Website =

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= Interbank rateAnswer = 0.77520

Detail = Typical Cash Rate (Interbank rate + 4%) Answer = 0.8062080

It never makes sense to use the interbank rate as only banks get that favorable exchange rate.

Reply to
removeps-groups

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