Comparisons
Form 3520 vs. Form 3520-A: Foreign trust reporting
The short answer
Form 3520 reports certain transactions with foreign trusts, U.S. ownership of foreign trusts, and certain large foreign gifts or bequests. Form 3520-A is the annual information return for a foreign trust with a U.S. owner; it does not replace the owner’s separate Form 3520 obligations.
| Aspect | Form 3520 | Form 3520-A |
|---|---|---|
| Main scope | Trust events, ownership and certain gifts | Annual reporting of a foreign trust with a U.S. owner |
| Responsible party | Relevant U.S. person | Foreign trust; U.S. owner must ensure compliance |
| Foreign family gift | May apply if reporting rules are met | Not solely because of a gift |
| Trust distributions | Recipient reporting may apply | Provides beneficiary information when applicable |
| U.S. trust ownership | Owner reports annually | Trust reports annually when required |
| Filing timing | Generally tied to individual filing calendar | Generally different trust filing calendar |
| If trust does not file | Owner may need substitute return attached | Missing return requires owner attention |
When Form 3520 applies
A U.S. person may need Form 3520 for specified transfers to a foreign trust, certain ownership interests, or distributions received from a foreign trust. Separate rules cover certain large gifts or bequests from foreign persons. The relevant threshold and aggregation rules depend on the type of donor and transaction; not every overseas transfer is reportable. A transfer between your own accounts is not a gift merely because it crosses a border. Likewise, compensation for services is not turned into a gift by a family relationship or a payment description. Establish who provided the money and its legal character first.
When Form 3520-A applies
A foreign trust with at least one U.S. owner under the applicable grantor trust rules generally must file Form 3520-A, subject to applicable exceptions. It supplies information about the trust, its U.S. owners and its U.S. beneficiaries, including required owner and beneficiary statements. The U.S. owner is responsible for ensuring that the trust files and supplies the required information. Beneficiary status alone does not automatically make a person the U.S. owner. Trust residence and ownership follow federal tax definitions, so the location of a bank account or the trust’s informal family name does not settle these questions.
When both apply and what to do if the trust does not file
A U.S. owner can have an annual Form 3520 obligation while the foreign trust has a Form 3520-A obligation for the same year. The forms provide related information but do not substitute for one another. If the foreign trust does not timely file a complete and accurate Form 3520-A, the U.S. owner generally must complete a substitute Form 3520-A and attach it to Form 3520 according to the instructions. That substitute has specific timing rules tied to the owner’s Form 3520. Simply requesting records from a foreign trustee does not, by itself, satisfy the owner’s reporting responsibilities.
Common confusion about gifts, deadlines and tax
Receiving a reportable foreign gift does not automatically mean that the recipient owes income tax on the gift. Trust distributions require a different analysis and can have income tax consequences. The forms also have different filing calendars: for calendar-year cases, Form 3520-A generally has an earlier original due date than an individual’s Form 3520. Do not assume one extension automatically covers both obligations. Obtain the trust deed, ownership analysis, distribution records and required statements early. Missing or incomplete returns can carry significant penalties, so review both forms separately and consult the current instructions before relying on a trustee’s assurance that everything has been handled.
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General information, not tax advice
This page provides general educational information about U.S. federal tax rules. It is not individualized tax, legal or accounting advice, and it does not create a client relationship. Results depend on each taxpayer's specific facts.
Written by Roger I. Chirino, founder of Chirino USA Accountants & Advisors P.A.
Supported by licensed CPAs, IRS Enrolled Agents (EAs), and experienced U.S. tax professionals focused on cross-border compliance and planning.