The maximum account value is defined as “a reasonable approximation of the greatest value of currency or nonmonetary assets in the account during the calendar year.” How is the maximum account value determined?

It can be reduced to a two-step process. First, determine the maximum value of the account during the year. Second, convert the maximum account value – for each account – into U.S. dollars using the exchange rate in effect on the last day of the calendar year.

Consider the following example. In 2014, Todd had a foreign account with a Japanese bank. First, Todd would determine the maximum value of the account in Yen. Second, he would convert the maximum value of the account into U.S. dollars using the exchange rate in effect on December 31, 2014.

What type of documentation might Todd rely upon to determine the maximum balance of his foreign account? Periodic account statements, so long as they accurately reflect the maximum balance of his account in 2014.