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Form 3520 Example Form 3520 Example Form 3520 Example: The IRS Form 3520 is used to report foreign transactions involving foreign gifts, inheritances and/or certain foreign trust transactions. The Form 3520 can be a complicated form, depending on the nature and extent of required reporting. Complicating the submission is that many U.S. Persons may not even know they have to file the form (oftentimes it is because they have no income or tax return filing…
Exceptions for Transfers to Foreign Trust 3520 Filing Exceptions to Foreign Trust 3520 Filing  Exceptions for Transfers to Foreign Trust 3520 Filing: Generally, a transfer to a foreign trust can require the transferor to report the transaction on Form 3520. But, as with any good IRS requirement, there are also exceptions, exclusions and limitations. Form 3520 provides for certain code section exceptions, when the transfers refer to three (3) main scenarios: Let’s review the exceptions…
Form 3520 Foreign Gift Penalty Abatement Form 3520 Foreign Gift Penalty Abatement Form 3520 Foreign Gift Penalty Abatement: When a U.S. person receives a gift from a foreign person, the U.S. person may have to report the foreign gift to the IRS. Whether or not the person has to file is determined by the type of foreign person (individual or entity) and the value of the gift. In recent years, the IRS has significantly increased…
Currency Restrictions on Foreign Gift Transfer Currency Restrictions on Foreign Gift Transfer   Currency Restrictions on Foreign Gift Transfer: In many foreign countries such as Taiwan and China, the governments in those countries have implemented currency transfer restrictions on money leaving the country. The purpose of the restrictions on transfer is to limit the amount of money that can leave the country. In a common scenario, a U.S. person adult child is to receive a…
Currency Restrictions on Gift Transfer Currency Restrictions on Gift Transfer   Currency Restrictions on Gift Transfer: In many foreign countries such as Taiwan and China, the governments in those countries have implemented currency transfer restrictions on money leaving the country. The purpose of the restrictions on transfer is to limit the amount of money that can leave the country. In a common scenario, a U.S. person adult child is to receive a large gift from…
Foreign Pension Account & Form 3520: (New) Report or Exempt? Foreign Pension Account & Form 3520 Foreign Pension Account & Form 3520: When a U.S. person has an interest in a foreign pension, that interest is considered an interest in a foreign trust. While technically foreign pensions are considered trusts, the question of whether they are reportable on IRS Forms 3520/3520-A is still unclear. This is further complicated by the fact that recent Revenue Ruling
Related Foreign Person Gifts to the U.S. & Form 3520 Related Foreign Person Gifts to the U.S. Related Foreign Person Gifts to US & Form 3520: Do I File?: When a U.S. person receives a gift from a foreign person, the IRS may require the gift to be reported to the Internal Revenue Service on Form 3520. In order to skirt the issue and circumvent reporting, foreign persons may try to split the gifts amongst…
Form 3520 Late Filing Form 3520 Late Filing Penalty Form 3520 Late Filing Penalty: The form 3520 is used to report gifts from foreign individuals, entities, as well as trust distributions to the IRS. The reason why this form has many taxpayers up in arms is because of the sheer magnitude of the penalties the IRS issues regarding the noncompliance. What makes the penalties so lopsided, is that many people who are penalized do…
Penalty Abatement For Foreign Gifts Penalty Abatement For Foreign Gifts Does Rev. Proc 2020-17 apply to Penalty Abatement For Foreign Gifts from Individuals?: Unfortunately, the answer is no. The Form 3520 is used to report foreign trust transactions, gifts and inheritances. The Form 3520-A is used to report foreign trusts. The recently released revenue procedure 2020-17 refers to certain retirement and non-retirement trust reporting that may be exempted on Form 3520/3520-A. It also provides an…
(New) Form 3520 Penalty Abatement: Relief & Exemptions (New) Penalty Abatement for IRS Form 3520 Form 3520 Penalty Abatement: The IRS Forms 3520 and 3520-A are international reporting forms used to disclose annual foreign gift and trust information to the U.S. government. When the forms are not filed timely, the IRS can (and does) issue penalties.  These penalties can be relatively severe.  When it comes to the foreign gift and inheritance reporting under form 3520,…