What is Form 3520?
IRS form for reporting transactions with foreign trusts and receipt of large foreign gifts or inheritances.
Definition
Form 3520, Annual Return To Report Transactions With Foreign Trusts and Receipt of Certain Foreign Gifts, must be filed by US persons who have transactions with foreign trusts (creation, transfers, distributions) or who receive large gifts or bequests from foreign persons. The threshold for reporting foreign gifts is $100,000 (or $18,567 for gifts from foreign corporations or partnerships in 2024).
Who Needs to Know This?
US persons who created or transferred property to a foreign trust, received distributions from a foreign trust, or received gifts over the threshold from foreign persons.
Key Deadline
April 15 (with extensions available)
Potential Penalties
35% of gross value of trust distributions or transfers; 25% of foreign gifts not reported; minimum $10,000 penalty
Related Forms
Common Mistakes to Avoid
- 1Not reporting large gifts from foreign relatives
- 2Confusing Form 3520 with Form 3520-A (different filers)
- 3Not knowing that Canadian RRSPs may trigger reporting
- 4Missing the filing deadline and incurring steep penalties
Related Terms
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