Tax implications on money sitting with TransferWise

Hi - I live in the US. Before the pandemic hit, I had planned to spend some vacation time in Europe. At the beginning of 2020, I took advantage of low FX rates and bought a few hundred Euros via TransferWise. I thought it was a good idea to use for my spending throughout the EU. Well those Euros have just been sitting in my TransferWise account in Belgium ever since. No moving around or any interest earned, just sitting.

Does this account need to be reported to the US IRS? I would certainly think so if any kind of income is involved but just the fact that it exists? Interestingly enough, TransferWise, on their help page, states that they do not report any information to any tax authority.

Thanks.

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See this authoritative page:

You are also required to pay capital gains tax if you exchange those Euros and make a profit. Other actions may be taxable as well.

Slightly off topic but watch out for TW’s upcoming fee on “large” EUR balances if you hold more than 15K EUR.

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According to Transferwise, they imply that your money is held in the same country where you are located. see below. However, It isnt totally clear. If this is the case, there would be no FBAR or other reporting requirements for holding money in a US bank for a US citizen.

Does anyone know if I hold EUR whether those are still in a US bank? My debit card they issued is with Community Federal Credit union, which i assume is US based. However ,Transferwise says they themselves are not a bank. Very unclear.

Where is my money stored?

TransferWise keeps your money in established financial institutions like JP Morgan Chase and Barclays. Where your money is depends on which country your TransferWise account address is in — if your account address in the UK, for example, we keep your money in Barclays, or other financial institutions in the EEA.