Form 3520

Form 3520

A form that a U.S. person files with the IRS to report some transactions with a foreign trust, ownership of a foreign trust, or certain gifts from a foreign person or corporation. One must file a separate Form 3520 for each foreign trust with which one interacts.
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The due date for Form 3520, Annual Return to Report Transactions With Foreign Trusts and Receipt of Certain Foreign Gifts, will be April 15 for calendar-year filers, with a maximum six-month extension.
Annual Return to Report Transactions with Foreign Trusts and Receipt of Certain Foreign Gifts: The penalties for not filing form 3520 are generally the greater of $10,000 or $35,000 percent of the gross value of any property transferred or distributions received as the case may be.
From 1990 through 2006, the number of Form 3520 returns filed reporting foreign "grantor" and "nongrantor" trust transactions and certain foreign gifts rose from 133 to 7,956 (almost 5,900 percent), while the number of Form 3520-A foreign "grantor" trust returns filed rose from 291 to 3,819 (over 1,200 percent) (Figure A).
Similar treatment was extended to individuals who need to file Form 3520 for interests in foreign trusts or Form 5471 for interests in foreign corporations, under certain circumstances.
49) Form 3520 is due at the same time as her income tax return is due for the year in which such creation or transfer took place, so Failure to file may subject a transferor to a penalty equal to thirty-five percent of the amount transferred.
Since the penalties for not filing Form 3520 and Form 3520-A can be severe, many estate planners have recommended that these forms be filed.
From 1990 through 2002, the number of Form 3520 returns filed reporting foreign trust transactions and certain foreign gifts rose by over 3,400 percent, while the number of Form 3520-A foreign "grantor" trust returns filed rose by over 700 percent (Figure A) [1].
File Form 3520 (if necessary) if your individual income tax return was extended at August 15.
Foreign gifts or bequests and distributions from and relationships with foreign trusts are reportable on Form 3520, Annual Return to Report Transactions With Foreign Trusts and Receipt of Certain Foreign Gifts, or 3520-A, Annual Information Return of Foreign Trust With a U.
gov/professionals/taxnews for the latest on revisions to the Form 3520.
Unlike the possibility for duplicative FBAR and FATCA reporting, no reporting under FATCA is required when specified foreign assets are already reported on certain other tax forms by the specified person: Form 3520, Annual Return to Report Transactions with Foreign Trusts and Receipt of Certain Foreign Gifts; Form 5471, Information Return of U.
The total value of property transferred, as reported on Form 3520, rose from $273 million for 1990 to $852 million for 1998.