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Foreign Trust Form 3520-A Filing Requirements & Reporting Form 3520-A Foreign Trust Filing Requirements What are the Form 3520-A Foreign Trust Filing Requirements: When it comes to international tax and offshore tax compliance for US Persons, it doesn’t get much more complicated than foreign trusts and Form 3520-A (Annual Information Return of Foreign Trust With a U.S. Owner (Under section 6048(b)). Whether it is a grantor trust, non-grantor trust, or an unintentional trust such…
Is an Incomplete Gift or Inheritance Reported on Form 3520 Are Incomplete Gifts or Inheritances Reported on Form 3520? Is an Incomplete Gift or Inheritance Reported on Form 3520: A common question we receive regarding the reporting of Form 3520 to the IRS when receiving a large gift from a foreign person — is when do the reporting requirements kick in. Stated another way, at what point does the US Person have to actually report…
Extension for Form 3520 Extension for Form 3520  Extension for Form 3520: When it comes to IRS form 3520, one of the biggest issues for US Person taxpayers is when they have to file the 3520 form after the due date — May 17 for 2021 — even when an extension has been timely filed. While technically this does not mean that the Form 3520 is being filed “late,” per se — since it was…
Foreign Trust Distributions Threshold and Form 3520 Foreign Trust Distributions Threshold and Form 3520 Foreign Trust Distributions Threshold and Form 3520: When it comes to US persons and IRS Form 3520, reporting issues involving distributions from foreign trusts make reporting the form more complicated than other issues involving receipt of a large gift from a foreign person. In fact, while there are specific threshold requirements when a person receives a gift from either a foreign…
Common Form 3520 Mistakes to Avoid Common Form 3520 Mistakes to Avoid Common Form 3520 Mistakes to Avoid: One of the most dangerous international information reporting forms for US Persons is one that for most people has nothing to do with tax. The form 3520 is used to report a large gift from a foreign person (individual or entity) and trust distributions. Oftentimes, there is no tax consequences associated with the form 3520 filing. Rather,…
How Foreign Gifts & Form 3520 Leads to FBAR Filing How Foreign Gifts & Form 3520 Leads to FBAR How Foreign Gifts & Form 3520 Leads to FBAR Filing Requirements: Oftentimes, when a US person receives a money gift from a foreign person and the value of that gift exceeds the form 3520 filing requirement, the US person has to file Form 3520 with the IRS. It is not uncommon for the Taxpayer to…
Form 3520 Form 3520 Form 3520: In recent years, the Internal Revenue Service has significantly increased the enforcement for the reporting of foreign gifts and trusts. When a US person receives a large gift from a foreign person or has certain transactions with a foreign trust — they may become subject to reporting requirements on Forms 3520 and/or 3520-A. These forms are not necessarily used for tax purposes as much as they are used for…
Form 3520/3520-A Requirement for Reporting Foreign Pension Form 3520/3520-A Requirement for Foreign Pension 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 2020-17 exempts certain…
Nongrantor Trust and Form 3520 Nongrantor Trust and Form 3520 Nongrantor Trust and Form 3520: When most U.S. persons refer to trusts, they are generally referring to a basic grantor trust. With a grantor trust, the grantor retains power over the trust. For example, if a person owns a home and decides to put it into a trust, they form a revocable trust. The grantor or creator of the trust is able to control, change,…
Penalty Relief and Exemptions for Form 3520 New Exemptions & 3520 Penalty Relief Procedures Penalty Relief & Exemptions Under New Form 3520 Guidelines: The Form 3520 penalties can be severe. When a person receives a gift from a foreign person, the penalty can be upwards of 25% value of the gift. So for example, if a person receives a $600,000 gift or inheritance from a Foreign Person, the general IRS penalty for that amount would…