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2015

Department of the Treasury

Internal Revenue Service

Instructions for Form 3520

Annual Return To Report Transactions With Foreign Trusts

and Receipt of Certain Foreign Gifts

Section references are to the Internal Revenue Code unless

year or a related foreign trust held an outstanding obligation

otherwise noted.

issued by you (or an obligation of a person related to you)

that you treated as a qualified obligation (defined later) during

General Instructions

the current tax year.

Complete the identifying information on page 1 of the form

Future Developments

and Part III. See the instructions for Part III.

4. You are a U.S. person who, during the current tax

For the latest information about developments related to

year, received either:

Form 3520 and its instructions, such as legislation enacted

after they were published, go to

a. More than $100,000 from a nonresident alien

individual or a foreign estate (including foreign persons

What's New

related to that nonresident alien individual or foreign estate)

that you treated as gifts or bequests; or

Item C. Item C adds a check box to be completed by a Form

3520 filer who satisfies his or her Form 8938, Statement of

b. More than $15,601 from foreign corporations or

Specified Foreign Financial Assets, reporting obligations by

foreign partnerships (including foreign persons related to

filing Form 3520 and completing Part IV, Excepted Specified

such foreign corporations or foreign partnerships) that you

Foreign Financial Assets, of Form 8938. For further

treated as gifts.

information, see the Instructions for Form 8938, generally,

Complete the identifying information on page 1 of the form

and in particular, Duplicative reporting and Part IV. Excepted

and Part IV. See the instructions for Part IV.

Specified Foreign Financial Assets.

Note. You may also be required to file FinCEN Form 114,

Purpose of Form

Report of Foreign Bank and Financial Accounts (FBAR).

U.S. persons (and executors of estates of U.S. decedents)

Exceptions To Filing

file Form 3520 to report:

Certain transactions with foreign trusts,

Form 3520 does not have to be filed to report the following

Ownership of foreign trusts under the rules of sections 671

transactions.

through 679, and

Transfers to foreign trusts described in sections 402(b),

Receipt of certain large gifts or bequests from certain

404(a)(4), or 404A.

foreign persons.

Most fair market value (FMV) transfers by a U.S. person to

a foreign trust. However, some FMV transfers must

A separate Form 3520 must be filed for transactions with

nevertheless be reported on Form 3520 (e.g., transfers in

each foreign trust.

exchange for obligations that are treated as qualified

Who Must File

obligations, transfers of appreciated property to a foreign

trust for which the U.S. transferor does not immediately

File Form 3520 if any one or more of the following applies:

recognize all of the gain on the property transferred, transfers

1. You are the responsible party for reporting a reportable

involving a U.S. transferor that is related to the foreign trust).

event that occurred during the current tax year, or you held

See section III of Notice 97-34, 1997-25 I.R.B. 22.

an outstanding obligation of a related foreign trust (or an

Transfers to foreign trusts that have a current

obligation of a person related to the trust) that you treated as

determination letter from the Internal Revenue Service (IRS)

a qualified obligation during the current tax year. Responsible

recognizing their status as exempt from income taxation

party, reportable event, and qualified obligation are defined

under section 501(c)(3).

later.

Transfers to, ownership of, and distributions from a

Canadian registered retirement savings plan (RRSP), a

Complete the identifying information on page 1 of the form

Canadian registered retirement income fund (RRIF), or any

and the relevant portions of Part I. See the instructions for

other Canadian retirement plan that is within the meaning of

Part I.

section 3 of Rev. Proc. 2014-55. See Rev. Proc. 2014-55,

2. You are a U.S. person who, during the current tax

2014-44 I.R.B. 753, available at

year, is treated as the owner of any part of the assets of a

2014–44_IRB/ar10.html.

foreign trust under the rules of sections 671 through 679.

Distributions from foreign trusts that are taxable as

Complete the identifying information on page 1 of the form

compensation for services rendered (within the meaning of

and Part II. See the instructions for Part II.

section 672(f)(2)(B) and its regulations), so long as the

recipient reports the distribution as compensation income on

Note. You are required to complete Part II even if there have

its applicable federal income tax return.

been no transactions involving the trust during the tax year.

Distributions from foreign trusts to domestic trusts that

3. You are a U.S. person who received (directly or

have a current determination letter from the IRS recognizing

indirectly) a distribution from a foreign trust (including the

uncompensated use of trust property) during the current tax

Aug 24, 2015

Cat. No. 23068I

Instructions For Form 3520 - Annual Return To Report Transactions With Foreign Trusts And Receipt Of Certain Foreign Gifts - 2015

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