Get the free Form 3520

Instructions for U.S. persons to report transactions with foreign trusts and receive certain foreign gifts.

How to fill out form 3520

How to fill out Form 3520

1. Obtain Form 3520 from the IRS website or your tax advisor.
2. Fill in your name, address, and Social Security number at the top of the form.
3. Complete Part I to report any gifts from foreign persons or foreign trusts.
4. Fill out Part II if you received distributions from a foreign trust.
5. Complete Part III if you are transferring property to a foreign trust.
6. Provide details of the foreign trust or the foreign person making the gift.
7. Report the value of the gifts or the distributions in the appropriate sections.
8. Attach any required statements or additional forms as specified in the instructions.
9. Review the form for accuracy before signing and dating it.
10. Submit Form 3520 by the due date, either by mail or electronically, if applicable.

Who needs Form 3520?

1. U.S. citizens and residents who receive gifts or bequests from foreign individuals or estate.
2. U.S. persons who are beneficiaries of a foreign trust.
3. Individuals who transfer property to a foreign trust.
4. Anyone involved in certain transactions with foreign trusts as outlined by the IRS.

People Also Ask about

Can I file form 3520 electronically?

Filing Method: Although you can sign Form 3520 electronically, e-filing is not available for this form.

Does amending a tax return trigger an audit?

While an amended return alone is not a guaranteed audit trigger, certain red flags in your tax filings — whether original or amended — can increase your chances of being selected for review. The IRS uses an automated system to identify discrepancies and anomalies that deviate from normal taxpayer patterns.

What triggers an FBAR audit?

What Triggers an FBAR Audit? There's no set trigger for an FBAR audit, but some common reasons include the following: Random selection: FinCEN may choose tax filers randomly to verify compliance. Discrepancies: Inconsistencies or errors in the FBAR filing may lead to an audit.

What happens if you don't file form 3520?

A penalty applies if Form 3520 is not timely filed or if the information is incomplete or incorrect (see below for an exception if there is reasonable cause). Generally, the initial penalty is equal to the greater of $10,000 or the following (as applicable).

Who is required to file a form 3520?

Who is required to file Form 3520? US persons (citizens, resident aliens, and residents for tax purposes) must file Form 3520 to report gifts and inheritances received from foreign individuals (also known as nonresident aliens) and foreign estates.

Does form 3520 trigger an audit?

A Form 3520 filing may be audited by the IRS at any time within the statute of limitations. While extremely unlikely, a timely-filed Form 3520 could be found so incomplete or inaccurate that it could be treated as a failure to file and subject the US person to Form 3520 penalties.

Do I have to pay tax on a foreign gift in the US?

It's important to know what you're getting into, especially if you have significant assets or are handling a large transfer. For instance, while the US doesn't tax foreign gifts directly, any income you make from those gifted assets, like rent from a property, will be subject to US taxes.

What triggers the IRS to audit you?

Key Takeaways. The IRS uses a combination of automated and human processes to select which tax returns to audit. Not reporting all of your income is an easy-to-avoid red flag that can lead to an audit. Taking excessive business tax deductions and mixing business and personal expenses can lead to an audit.

For pdfFiller’s FAQs

What is Form 3520?

Form 3520 is an IRS form used to report transactions with foreign trusts, gifts from foreign persons, and the creation of foreign trusts.

Who is required to file Form 3520?

U.S. taxpayers must file Form 3520 if they receive foreign gifts over certain thresholds, have a foreign trust, or are a U.S. owner of a foreign trust.

How to fill out Form 3520?

To fill out Form 3520, provide your personal information, report the required details about the foreign trust or gift, and ensure all necessary documentation is attached.

What is the purpose of Form 3520?

The purpose of Form 3520 is to ensure compliance with U.S. tax laws regarding foreign trusts and gifts, helping the IRS track foreign income and assets.

What information must be reported on Form 3520?

Information on Form 3520 includes details about the foreign trust, the identity of foreign donors, the amounts of gifts received, and transactions carried out with foreign entities.