Andrew Mitchel LLC

International Tax Blog - New and Interesting International Tax Issues


Exchange Rates for 2023

2024-01-09

Image of Schedule H, Lines 5d and 5e

Last Friday the IRS published average currency exchange rates for 2023. These average rates are used:

  • On Schedules H and M of Form 5471,
  • To convert local currency Subpart F Income and GILTI tested income amounts into U.S. dollars. Code §989(b)(3), and
  • To convert GILTI inclusion amounts back into the functional currency of the CFCs. See Form 8992, Schedule A, Column (l) and Treas. Reg. §1.951A-5(b)(3).

I also use these average rates to convert from local currency to U.S. dollars on Schedule C (Income Statement) of Form 5471.

The Treasury Department has also published year-end currency exchange rates for 2023. These year-end exchange rates are used:

  • On Form 8938, and
  • On the FBAR.

I also use these year-end rates to convert from local currency to U.S. dollars on Schedule F (Balance Sheet) of Form 5471. For example, I use the December 31, 2022 year-end rate to convert the 2023 beginning of the year balance sheet and the December 31, 2023 year-end rate to convert the 2023 end of the year balance sheet. You can access the year-end exchange rates from our exchange rates page.

Tags: Form 5471, Form 8938, Other - FBAR, Form 8992