Instructions for Form 3520

(Rev. December 2023)

Annual Return To Report Transactions With Foreign Trusts and Receipt of Certain 

Foreign Gifts

Department of the Treasury

Internal Revenue Service

Section references are to the Internal Revenue Code unless 

otherwise noted.

Future Developments

For the latest information about developments related to 

Form 3520 and its instructions, such as legislation enacted 

after they were published, go to IRS.gov/Form3520.

What’s New

Continuous-use form and instructions. Form 3520 and 

these instructions have been converted from an annual 

revision to continuous use. Both the form and instructions will 

be updated as needed. For the most recent version, go to 

IRS.gov/Form3520.

Reminder

Exemption from information reporting under section 

6048. Rev. Proc. 2020-17 exempts from foreign trust 

information reporting certain eligible individuals’ transactions 

and ownership. See Exceptions To Filing, later.

General Instructions

Purpose of Form

U.S. persons (and executors of estates of U.S. decedents) 

file Form 3520 with the IRS to report:

• Certain transactions with foreign trusts,

• Ownership of foreign trusts under the rules of sections 671 

through 679, and

• Receipt of certain large gifts or bequests from certain 

foreign persons.

A separate Form 3520 must be filed for transactions with 

each foreign trust.

Who Must File

File Form 3520 if any one or more of the following apply.

1. You are the responsible party for reporting a reportable 

event that occurred during the current tax year, or you are a 

U.S. person who transferred property (including cash) to a 

related foreign trust (or a person related to the trust) in 

exchange for an obligation or you hold a qualified obligation 

from that trust that is currently outstanding. For definitions, 

see Responsible Party, Reportable Event, Qualified 

Obligation, and Person related to a foreign trust, later.

Complete the identifying information on page 1 of the form 

and the relevant portions of Part I. See the instructions for 

Part I.

2. You are a U.S. person who, during the current tax year, 

is treated as the owner of any part of the assets of a foreign 

trust under the rules of sections 671 through 679. U.S. 

person and owner are defined later.

Complete the identifying information on page 1 of the form 

and Part II. See the instructions for Part II.

Note. You are required to complete Part II even if there have 

been no transactions involving the trust during the tax year. 

You may also be required to complete a substitute Form 

3520-A, Annual Information Return of Foreign Trust With a 

U.S. Owner, and attach it to your Form 3520. See Penalties, 

later.

3. You are a U.S. person (including a U.S. owner) or an 

executor of the estate of a U.S. person who received, directly 

or indirectly, a distribution from a foreign trust during the 

current tax year; or you are a U.S. person who is a U.S. owner 

or beneficiary of a foreign trust and in the current tax year you 

or a U.S. person related to you received (1) a loan of cash or 

marketable securities (including an extension of credit) 

directly or indirectly from such foreign trust, or (2) the 

uncompensated use of trust property; or you are a U.S. 

person who is a U.S. owner or beneficiary of a foreign trust 

and in the current tax year such foreign trust holds an 

outstanding qualified obligation of yours or a U.S. person 

related to you. For definitions, see U.S. Person, Owner, 

Distribution, U.S. Beneficiary, and Related Person, later.

Complete the identifying information on page 1 of the form 

and Part III. In the case of a U.S. person that is an estate, 

check “Executor” on line B on page 1. See the instructions for 

Part III.

4. You are a U.S. person who, during the current tax year, 

received either:

a. More than $100,000 from a nonresident alien 

individual or a foreign estate (including foreign persons 

related to that nonresident alien individual or foreign estate) 

that you treated as gifts or bequests; or

b. More than the section 6039F threshold amount from 

foreign corporations or foreign partnerships (including foreign 

persons related to such foreign corporations or foreign 

partnerships) that you treated as gifts. The threshold amount 

is available at IRS.gov/Newsroom/Inflation-Adjusted-TaxItems-by-Tax-Year. Select the applicable tax year news 

release, then click on the Rev. Proc. link and search for 

section 6039F to see the threshold amount under Notice of 

Large Gifts Received from Foreign Persons.

Complete the identifying information on page 1 of the form 

and Part IV. See the instructions for Part IV.

Note. You may be required to file Financial Crimes 

Enforcement Network (FinCEN) Form 114, Report of Foreign 

Bank and Financial Accounts (FBAR). In addition, you may 

be required to file Form 8938, Statement of Specified Foreign 

Financial Assets. For more information, go to IRS.gov/FBAR.

Exceptions To Filing

Form 3520 does not have to be filed to report the following 

transactions.

• Transfers to foreign trusts described in section 402(b), 

404(a)(4), or 404A.

• Most fair market value (FMV) transfers by a U.S. person to 

a foreign trust. However, some FMV transfers must 

nevertheless be reported on Form 3520 (for example, 

Oct 10, 2023 Cat. No. 23068I
transfers in exchange for obligations that are treated as 

qualified obligations, transfers of appreciated property to a 

foreign trust for which the U.S. transferor does not 

immediately recognize all of the gain on the property 

transferred, and transfers involving a U.S. transferor that is 

related to the foreign trust). See section III of Notice 97-34, 

1997-25 I.R.B. 22, available at IRS.gov/pub/irs-irbs/

irb97-25.pdf.

• Transfers to foreign trusts that have a current determination 

letter from the IRS recognizing their status as exempt from 

income taxation under section 501(c)(3).

• Transfers to, ownership of, and distributions from a 

Canadian registered retirement savings plan (RRSP), a 

Canadian registered retirement income fund (RRIF), or any 

other Canadian retirement plan that is within the meaning of 

section 3 of Rev. Proc. 2014-55. See Rev. Proc. 2014-55, 

2014-44 I.R.B. 753, available at IRS.gov/IRB/

2014-44_IRB#RP-2014-55.

• Certain eligible individuals’ transfers to, ownership of, and 

distributions from certain tax-favored foreign retirement trusts 

and certain tax-favored foreign nonretirement savings trusts, 

as described in section 5 of Rev. Proc. 2020-17. For more 

information about whether you are an eligible individual and 

whether your foreign trust qualifies for an exemption from 

foreign trust information reporting, see Rev. Proc. 2020-17, 

2020-12 I.R.B. 539, available at IRS.gov/IRB/

2020-12_IRB#REV-PROC-2020-17.

• Deemed transfers from domestic trusts that become 

foreign trusts to the extent the trust is treated as owned by a 

foreign person, after application of section 672(f).

• Distributions from foreign trusts that are taxable as 

compensation for services rendered (within the meaning of 

section 672(f)(2)(B) and its regulations), so long as the 

recipient reports the distribution as compensation income on 

its applicable federal income tax return.

• Distributions from foreign trusts to domestic trusts that 

have a current determination letter from the IRS recognizing 

their status as exempt from income taxation under section 

501(c)(3).

Joint Returns

If you and your spouse are filing a joint income tax return for 

the current tax year, and you are both transferors, grantors, or 

beneficiaries of the same foreign trust, then you may file a 

joint Form 3520 for the same tax year. If you and your spouse 

are filing a joint Form 3520, check the box on line 1i on 

page 1.

Additional Reporting and Tax 

Information

For more information on foreign trust reporting and tax 

consequences, go to the IRS website at IRS.gov/

ForeignTrust.

When and Where To File

In general, a U.S person’s Form 3520 is due on the 15th day 

of the 4th month following the end of such person’s tax year 

for income tax purposes. If a U.S. person is granted an 

extension of time to file an income tax return, Form 3520 is 

due no later than the 15th day of the 10th month following the 

end of the U.S. person’s tax year.

Note. This may differ from and is not tied to the due date of 

the U.S. person’s income tax return.

If you are an individual who is a U.S. citizen or resident 

who satisfies one of the following conditions on the due date 

of your income tax return, then your Form 3520, which would 

generally be due on the 15th day of the 4th month (April 15) 

following the end of your tax year for income tax purposes, is 

instead due on the 15th day of the 6th month (June 15) 

following the end of that year. You must include a statement 

on the Form 3520 showing that you are a U.S. citizen or 

resident who meets one of these conditions.

• You live outside of the United States and Puerto Rico and 

your place of business or post of duty is outside the United 

States and Puerto Rico.

• You are in the military or naval service on duty outside the 

United States and Puerto Rico.

If you are an individual who is a U.S. citizen or resident 

and are granted an extension of time to file your income tax 

return, the due date for filing Form 3520 is no later than the 

15th day of the 10th month (October 15) following the end of 

your tax year.

If you are filing a Form 3520 for a U.S. decedent, the due 

date is the 15th day of the 4th month (April 15) following the 

end of the decedent's last tax year for income tax purposes. If 

the U.S. decedent is granted an extension of time to file their 

income tax return, then the due date for filing Form 3520 is no 

later than the 15th day of the 10th month (October 15) 

following the end of decedent’s last tax year.

If you are filing a Form 3520 for a U.S. decedent's estate, 

the due date is the 15th day of the 4th month following the 

end of the estate's tax year for income tax purposes. If the 

U.S. decedent’s estate is granted an extension of time to file 

its income tax return, then the due date for filing Form 3520 is 

no later than the 15th day of the 10th month following the end 

of the estate’s tax year.

If the due date falls on a Saturday, Sunday, or legal 

holiday, file by the next day that is not a Saturday, Sunday, or 

legal holiday.

Send Form 3520 to the following address.

Internal Revenue Service Center

P.O. Box 409101

Ogden, UT 84409

Form 3520 must have all required attachments to be 

considered complete.

If a complete Form 3520 is not filed by the due date, 

including extensions, the time for assessment of any tax 

imposed with respect to any event or period to which the 

information required to be reported in Parts I through III of 

such Form 3520 relates will not expire before the date that is 

3 years after the date on which the required information is 

reported. See section 6501(c)(8).

Who Must Sign

If the return is filed by:

• An individual or a fiduciary, it must be signed and dated by 

that individual or fiduciary;

• A partnership, it must be signed and dated by a general 

partner or limited liability company member; or

• A corporation, it must be signed and dated by the 

president, vice president, treasurer, assistant treasurer, chief 

accounting officer, or any other corporate officer (such as a 

tax officer) who is authorized to sign.

-2- Instructions for Form 3520 (Rev. 12-2023)
The paid preparer must complete the required preparer 

information at the bottom of page 6 of Form 3520 and must 

be sure to:

• Sign the return in the space provided for the preparer's 

signature, and

• Give a copy of the return to the filer.

Inconsistent Treatment of Items

The U.S. beneficiary’s and U.S. owner's tax returns must be 

consistent with the Form 3520-A filed by the foreign trust 

unless you report the inconsistency to the IRS. If you are 

treating items on your tax return differently from the way the 

foreign trust treated them on its return, file Form 8082, Notice 

of Inconsistent Treatment or Administrative Adjustment 

Request (AAR). See Form 8082 for more details.

Penalties

Section 6677. 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).

• 35% of the gross value of any property transferred to a 

foreign trust for failure by a U.S. transferor to report the 

creation of or transfer to a foreign trust in Part I.

• 35% of the gross value of the distributions received from a 

foreign trust for failure by a U.S. person to report receipt of 

the distribution in Part III.

• 5% of the gross value of the portion of the foreign trust's 

assets treated as owned by a U.S. person under the grantor 

trust rules (sections 671 through 679), if the foreign trust (a) 

fails to file a timely Form 3520-A and furnish the required 

annual statements to its U.S. owners and U.S. beneficiaries, 

or (b) does not furnish all of the information required by 

section 6048(b) or includes incorrect information. If a foreign 

trust fails to file Form 3520-A, the U.S. owner must complete 

and attach a substitute Form 3520-A to the U.S. owner’s 

Form 3520 by the due date of the U.S. owner’s Form 3520 

(and not the due date for the Form 3520-A, which is 

otherwise due by the 15th day of the 3rd month after the end 

of the trust’s tax year) in order to avoid being subject to the 

penalty for the foreign trust’s failure to timely file Form 

3520-A. For example, a substitute Form 3520-A that, to the 

best of the U.S. owner’s ability, is completed and attached to 

the U.S. owner’s Form 3520 by the due date for the Form 

3520 (such as April 15 for U.S. owners who are individuals), 

is considered to be timely filed. See section 6677(a) through 

(c) and the instructions for Part II of this form and Form 

3520-A.

Additional penalties will be imposed if the noncompliance 

continues for more than 90 days after the IRS mails a notice 

of failure to comply with the required reporting. If the IRS can 

determine the gross reportable amount (defined later), then 

the penalties will be reduced as necessary to assure that the 

aggregate amount of such penalties does not exceed the 

gross reportable amount. For more information, see section 

6677.

Reasonable cause. No penalties will be imposed if the 

taxpayer can demonstrate that the failure to comply was due 

to reasonable cause and not willful neglect.

Note. The fact that a foreign country would impose penalties 

for disclosing the required information is not reasonable 

cause. Similarly, reluctance on the part of a foreign fiduciary 

or provisions in the trust instrument that prevent the 

disclosure of required information is not reasonable cause. 

See section 6677(d) for additional information.

Section 6039F. In the case of a failure to timely report 

foreign gifts described in section 6039F, the IRS may 

determine the income tax consequences of the receipt of 

such gift, and a penalty equal to 5% of the amount of such 

foreign gifts applies for each month for which the failure to 

report continues (not to exceed a total of 25%). No penalty 

will be imposed if the taxpayer can demonstrate that the 

failure to comply was due to reasonable cause and not willful 

neglect. See section 6039F for additional information.

Section 6662(j). If a U.S. owner of a foreign trust is subject 

to a penalty imposed under section 6662 for an 

underpayment of tax required to be shown on a return, then 

such penalty may be increased under section 6662(j) for any 

portion of an underpayment which is attributable to any 

transaction involving any asset with respect to which 

information was required to be provided on Form 3520-A. For 

more information about undisclosed foreign financial asset 

understatements, see section 6662(j). No penalty will be 

imposed with respect to any portion of an underpayment if 

the taxpayer can demonstrate that the failure to comply was 

due to reasonable cause with respect to such portion of the 

underpayment and the taxpayer acted in good faith with 

respect to such portion of the underpayment. See section 

6662 and section 6664(c) for additional information.

Definitions

Distribution

A distribution received directly or indirectly from a foreign 

trust for section 6048(c) reporting purposes is any gratuitous 

transfer of money or other property from a foreign trust, 

whether or not a portion of such trust is treated as a grantor 

trust under the grantor trust rules of sections 671 through 

679, and without regard to whether the recipient is 

designated as a beneficiary by the terms of the trust. A 

distribution includes the receipt of trust corpus and the 

receipt of a gift or bequest described in section 663(a).

A distribution also includes constructive transfers from a 

foreign trust. For example, if charges you make on a credit 

card are paid by a foreign trust or guaranteed or secured by 

the assets of a foreign trust, the amount charged will be 

treated as a distribution to you by the foreign trust. Similarly, if 

you write checks on a foreign trust's bank account, the 

amount will be treated as a distribution. Also, if you receive a 

payment from a foreign trust in exchange for property 

transferred to the trust or services rendered to the trust, and 

the FMV of the payment you received exceeds the FMV of 

the property transferred or services rendered, the excess will 

be treated as a distribution to you. See section V of Notice 

97-34.

Examples. 

1. If you sell stock with an FMV of $100 to a foreign trust 

and receive $150 in exchange, you have received a 

distribution of $50.

2. If you receive $100 from the trust for services 

performed by you for the trust, and the services have an FMV 

of $20, you have received a distribution of $80.

If you are a grantor or beneficiary of a foreign trust and you 

(or a U.S. person related to you) directly or indirectly received 

a loan of cash or marketable securities from a foreign trust, or 

you (or a U.S. person related to you) used any property 

owned by a foreign trust without paying FMV within a 

Instructions for Form 3520 (Rev. 12-2023) -3-
reasonable amount of time, the amount of such loan or the 

FMV of the use of trust property will be treated as a 

distribution for reporting purposes. For this purpose, a loan 

by an unrelated third party that is guaranteed by a foreign 

trust is generally treated as a loan from the trust. See 

section V.A of Notice 97-34.

Foreign Trust and Domestic Trust

A foreign trust is any trust other than a domestic trust.

A domestic trust is any trust if:

1. A court within the United States is able to exercise 

primary supervision over the administration of the trust, and

2. One or more U.S. persons have the authority to control 

all substantial decisions of the trust.

Grantor

A grantor includes any person who creates a trust or directly 

or indirectly makes a gratuitous transfer of cash or other 

property to a trust. A grantor includes any person treated as 

the owner of any part of a foreign trust's assets under 

sections 671 through 679, excluding section 678.

Note. If a partnership or corporation makes a gratuitous 

transfer to a trust, the partners or shareholders are generally 

treated as the grantors of the trust, unless the partnership or 

corporation made the transfer for a business purpose of the 

partnership or corporation.

If a trust makes a gratuitous transfer to another trust, the 

grantor of the transferor trust is treated as the grantor of the 

transferee trust, except that if a person with a general power 

of appointment over the transferor trust exercises that power 

in favor of another trust, such person is treated as the grantor 

of the transferee trust, even if the grantor of the transferor 

trust is treated as the owner of the transferor trust.

Grantor Trust

A grantor trust is any trust to the extent that the assets of the 

trust are treated as owned by a person other than the trust. 

See the grantor trust rules in sections 671 through 679. A 

part of the trust may be treated as a grantor trust to the extent 

that only a portion of the trust assets are owned by a person 

other than the trust.

Note. Under the HIRE Act, effective after March 18, 2010, if 

a foreign trust directly or indirectly loans cash or marketable 

securities to a U.S. person who does not repay the loan at a 

market rate of interest, or allows a U.S. person to use trust 

property without paying FMV within a reasonable period of 

time, the trust will be treated as having a U.S. beneficiary and 

is therefore treated as a grantor trust under the grantor trust 

rules.

Reporting by U.S. owners receiving distributions from 

foreign grantor trust. If a U.S. owner (defined later) 

receives, directly or indirectly, a distribution from a foreign 

trust of which the U.S. person is treated as the owner, the 

U.S. owner must only complete lines 24 and 27 in Part III.

Gratuitous Transfer

A gratuitous transfer to a foreign trust is any transfer to the 

trust other than (a) a transfer for FMV; or (b) a distribution to 

the trust with respect to an interest held by the trust (i) in an 

entity other than a trust (for example, a corporation or a 

partnership), or (ii) in an investment trust described in 

Regulations section 301.7701-4(c), a liquidating trust 

described in Regulations section 301.7701-4(d), or an 

environmental remediation trust described in Regulations 

section 301.7701-4(e). A gratuitous transfer includes any 

indirect transfer that is structured with a principal purpose of 

avoiding the application of section 679 or 6048.

A transfer of property to a trust may be considered a 

gratuitous transfer without regard to whether the transfer is a 

gift for gift tax purposes. See chapter 12 of subtitle B of the 

Code (that is, sections 2501 through 2524).

For purposes of this determination, if a U.S. person 

contributes property to a trust in exchange for any type of 

interest in the trust, such interest in the trust will be 

disregarded in determining whether FMV has been received. 

In addition, a U.S. person will not be treated as making a 

transfer for FMV merely because the transferor is deemed to 

recognize gain on the transaction.

If you transfer property to a related foreign trust in 

exchange for an obligation of the trust (or an obligation of a 

person related to the trust), it will be a gratuitous transfer 

unless the obligation is a qualified obligation. Any transfer in 

exchange for an obligation (whether or not a qualified 

obligation) must be reported under section 6048(a). For 

definitions, see Obligation and Qualified Obligation, later. 

See section III.B of Notice 97-34, and the regulations under 

sections 679 and 684 for additional information.

Gross Reportable Amount

Gross reportable amount is:

• The gross value of property involved in the creation of a 

foreign trust or the transfer of property to a foreign trust 

(including a transfer by reason of death);

• The gross value of any portion of a foreign trust treated as 

owned by a U.S. person under the rules of sections 671 

through 679 or any part of a foreign trust that is included in 

the gross estate of a U.S. citizen or resident;

• The gross value of the assets in a trust at the time the trust 

becomes a foreign trust, if the trust was a domestic trust to 

which a U.S. citizen or resident had previously transferred 

property, and provided that such U.S. citizen or resident is 

alive at the time the trust becomes a foreign trust (see section 

679(a)(5)); or

• The gross amount of distributions received from a foreign 

trust.

Gross Value or Amount

For purposes of determining the gross reportable amount, 

the gross value or gross amount of property is the value of 

property as determined under section 2512 and its 

regulations, without regard to any prohibitions or restrictions 

on a person's interest in the property. See section VII of 

Notice 97-34. Although formal appraisals are not generally 

required, you should keep contemporaneous records of how 

you arrived at your good faith estimate.

Guarantee

A guarantee:

• Includes any arrangement under which a person, directly 

or indirectly, assures, on a conditional or unconditional basis, 

the payment of another's obligation;

• Encompasses any form of credit support, and includes a 

commitment to make a capital contribution to the debtor or 

otherwise maintain its financial viability; or

• Includes an arrangement reflected in a “comfort letter,” 

regardless of whether the arrangement gives rise to a legally 

enforceable obligation. If an arrangement is contingent upon 

-4- Instructions for Form 3520 (Rev. 12-2023)
the occurrence of an event, in determining whether the 

arrangement is a guarantee, you must assume that the event 

has occurred.

Nongrantor Trust

A nongrantor trust is any trust to the extent that the assets of 

the trust are not treated as owned by a person other than the 

trust under the grantor trust rules in sections 671 through 

679. Thus, a nongrantor trust is treated as a taxable entity. A 

trust may be treated as a nongrantor trust with respect to only 

a portion of the trust assets. See Grantor Trust, earlier.

Obligation

An obligation includes any bond, note, debenture, certificate, 

bill receivable, account receivable, note receivable, open 

account, or other evidence of indebtedness, and, to the 

extent not previously described, any annuity contract.

Owner

An owner of a foreign trust is the person that is treated as 

owning any of the assets of a foreign trust under the rules of 

sections 671 through 679.

Property

Property means any property, whether tangible or intangible, 

including cash.

Qualified Obligation

A qualified obligation, for purposes of this form, is any 

obligation only if:

1. The obligation is reduced to writing by an express 

written agreement;

2. The term of the obligation does not exceed 5 years 

(including options to renew and rollovers);

3. All payments on the obligation are denominated in U.S. 

dollars;

4. The yield to maturity of the obligation is not less than 

100% of the applicable federal rate under section 1274(d) for 

the day on which the obligation is issued and not greater than 

130% of the applicable federal rate;

5. The U.S. person agrees to extend the period for 

assessment of any income or transfer tax attributable to the 

transfer and any consequential income tax changes for each 

year that the obligation is outstanding to a date not earlier 

than 3 years after the maturity date of the obligation, unless 

the maturity date of the obligation does not extend beyond 

the end of the U.S. person's tax year and is paid within such 

period (this is done on Part I, Schedule A, line 12, and Part III, 

line 26, as applicable); and

6. The U.S. person reports the status of the obligation, 

including principal and interest payments, on Part I, 

Schedule C, line 19, and Part III, line 28, as applicable, for 

each year that the obligation is outstanding.

Related Person

A related person generally includes any person who is 

related to you for purposes of sections 267 and 707(b). This 

includes, but is not limited to:

• A member of your family—your brothers and sisters, 

half-brothers and half-sisters, spouse, ancestors (parents, 

grandparents, etc.), lineal descendants (children, 

grandchildren, etc.), and the spouses of any of these 

persons; or

• A corporation in which you, directly or indirectly, own more 

than 50% in value of the outstanding stock.

See section 643(i)(2)(B) and the regulations under 

sections 267 and 707(b).

Person related to a foreign trust. A person is related to a 

foreign trust if such person, without regard to the transfer at 

issue, is a grantor of the trust, a beneficiary of the trust, or is 

related to any grantor or beneficiary of the trust. See the 

definition of related person above.

Reportable Event

A reportable event includes the following.

1. The creation of a foreign trust by a U.S. person.

2. The transfer of any money or property, directly or 

indirectly, to a foreign trust by a U.S. person, including a 

transfer by reason of death. This includes transfers that are 

deemed to have occurred under sections 679(a)(4) and (5).

3. The death of a U.S. citizen or resident if:

• The decedent was treated as the owner of any portion of a 

foreign trust under the rules of sections 671 through 679, or

• Any portion of a foreign trust was included in the gross 

estate of the decedent.

Responsible Party

Responsible party means:

• The grantor in the case of the creation of an inter vivos 

trust;

• The transferor, in the case of a reportable event (defined 

above) other than a transfer by reason of death; or

• The executor of the decedent's estate in any other case 

(whether or not the executor is a U.S. person).

U.S. Agent

A U.S. agent is a U.S. person (defined later) that has a 

binding contract with a foreign trust that allows the U.S. 

person to act as the trust's authorized U.S. agent in applying 

sections 7602, 7603, and 7604 with respect to:

• Any request by the IRS to examine records or produce 

testimony related to the proper U.S. tax treatment of amounts 

distributed, or required to be taken into account under the 

rules of sections 671 through 679, with respect to a foreign 

trust; or

• Any summons by the IRS for such records or testimony.

A U.S. grantor, a U.S. beneficiary, or a domestic 

corporation controlled by the grantor or beneficiary may act 

as a U.S. agent. However, you may not treat the foreign trust 

as having a U.S. agent unless you enter the name, address, 

and taxpayer identification number (TIN) of the U.S. agent on 

lines 3a through 3g on page 1 of the form. See Taxpayer 

identification numbers (TINs), later.

If a foreign trust with a U.S. owner does not have a U.S. 

agent, the IRS may redetermine the amounts required to be 

taken into account with respect to the foreign trust by the U.S. 

owner. See section 6048(b)(2).

The agency relationship must be established by the time 

the U.S. person files Form 3520 for the relevant tax year and 

must continue as long as the statute of limitations remains 

open for the relevant tax year. If the agent's responsibility as 

an agent of the trust is terminated for any reason (for 

example, agent's resignation, agent's liquidation, or agent's 

death), see section IV.B of Notice 97-34.

In order to authorize a U.S. person to act as an agent for 

purposes of section 6048(b)(2) or for purposes of section 

Instructions for Form 3520 (Rev. 12-2023) -5-
6048(c)(2)(A), the trust and the agent must enter into a 

binding agreement substantially in the format reflected under 

AUTHORIZATION OF AGENT in the Instructions for Form 

3520-A, amended as required.

U.S. Beneficiary

A U.S. beneficiary generally includes any U.S. person that 

could possibly benefit, directly or indirectly, from the trust 

(including an amended trust) at any time, whether or not the 

person is designated in the trust instrument as a beneficiary 

and whether or not the person can receive a distribution from 

the trust in the current year. In addition, a U.S. beneficiary 

includes:

• A foreign corporation that is a controlled foreign 

corporation (as defined in section 957(a)),

• A foreign partnership if a U.S. person is a partner of the 

partnership, and

• A foreign estate or trust if the estate or trust has a U.S. 

beneficiary. See section II of Notice 97-34 and the regulations 

under section 679 for additional information.

Foreign trust treated as having a U.S. beneficiary. In 

general, if a U.S. person, directly or indirectly, transfers 

property to a foreign trust (other than a deferred 

compensation or charitable trust described in section 6048(a)

(3)(B)(ii)), the foreign trust will be treated as having a U.S. 

beneficiary unless the terms of the trust instrument 

specifically prohibit any distribution of income or corpus to a 

U.S. person at any time, even after the death of the U.S. 

transferor or any event terminating the trust, and the trust 

cannot be amended or revised to allow such a distribution. 

For these purposes, an amount will be treated as 

accumulated for the benefit of a U.S. person even if the U.S. 

person's interest in the trust is contingent on a future event 

and regardless of whether anything is actually distributed to a 

U.S. person during that tax year.

Special rule in case of discretion to identify 

beneficiaries. For purposes of the general rule described 

earlier, if any person has the discretion of making a 

distribution from the trust to, or for the benefit of, any person, 

the trust will be treated as having a beneficiary who is a U.S. 

person unless the terms of the trust specifically identify the 

class of persons to whom such distributions may be made, 

and none of those persons are U.S. persons during the tax 

year.

Certain agreements and understandings treated as 

terms of the trust. For purposes of the general rule 

described earlier, if any U.S. person who directly or indirectly 

transfers property to the trust is directly or indirectly involved 

in any agreement or understanding (whether written, oral, or 

otherwise) that may result in the income or corpus of the trust 

being paid or accumulated to, or for the benefit of, a U.S. 

person, such agreement or understanding will be treated as a 

term of the trust.

Certain loans or uncompensated use of trust 

property. If a foreign trust is not already treated as having a 

U.S. beneficiary under the rules described earlier, the trust 

will be treated as having a U.S. beneficiary if, after March 18, 

2010, either:

• The foreign trust loans cash or marketable securities, 

directly or indirectly, to a U.S. person, and the U.S. person 

does not repay the loan at a market rate of interest within a 

reasonable period of time; or

• A U.S. person, directly or indirectly, uses property that is 

owned by the foreign trust and does not pay FMV of the use 

of such property within a reasonable period of time.

Presumption that foreign trust has U.S. beneficiary. If a 

U.S. person, directly or indirectly, transfers property to a 

foreign trust (other than a deferred compensation or 

charitable trust described in section 6048(a)(3)(B)(ii)), the 

IRS may treat such trust as having a U.S. beneficiary for 

purposes of applying section 679(d) to such transfer if the 

IRS requests information with respect to the transfer and the 

U.S. person fails to demonstrate to the satisfaction of the IRS 

that no portion of the income or corpus of the trust may ever 

be paid to or accumulated for the benefit of a U.S. person.

U.S. Person

A U.S. person is:

• A citizen or resident of the United States, including dual 

residents who claim the benefits under an income tax treaty 

(see Pub. 519, U.S. Tax Guide for Aliens, for guidance on 

determining resident alien status);

• A domestic partnership;

• A domestic corporation;

• Any estate (other than a foreign estate, within the meaning 

of section 7701(a)(31)(A)); and

• Any domestic trust (defined earlier).

U.S. Transferor

A U.S. transferor is any U.S. person who:

1. Creates or settles a foreign trust;

2. Directly or indirectly transfers money or property to a 

foreign trust (this includes deemed transfers under section 

679(a)(4) or section 679(a)(5));

3. Makes a sale to a foreign trust if the sale was at other 

than arm's-length terms or was to a related foreign trust, or 

makes (or guarantees) a loan to a related foreign trust; or

4. Is the executor of the estate of a U.S. person and:

a. The decedent made a testamentary transfer (a transfer 

by reason of death) to a foreign trust;

b. Immediately prior to death, the decedent was treated 

as the owner of any portion of a foreign trust under the rules 

of sections 671 through 679; or

c. Any portion of a foreign trust's assets were included in 

the estate of the decedent.

Generally, the person defined as the transferor is the 

responsible party (defined earlier) who must ensure that 

required information be provided or pay appropriate 

penalties.

Specific Instructions

Period Covered

For calendar-year filers, fill in the "calendar year" space at the 

top of the form. For fiscal-year filers, fill in the "tax year 

beginning" and "ending" spaces at the top of the form.

Item A—Initial Return, Final Return, 

Amended Return

Initial return. If this is the initial return you are filing 

concerning the foreign trust identified, check the “Initial 

return” box.

Final return. If no further returns for transactions with the 

foreign trust are required, check the “Final return” box.

-6- Instructions for Form 3520 (Rev. 12-2023)
Example. If you filed Form 3520 concerning transactions 

with a foreign trust and that trust terminated within the tax 

year, then the Form 3520 for the year in which the trust 

terminated would be a final return.

Amended return. If this Form 3520 is filed to amend a Form 

3520 that you previously filed for the same tax year, check 

the “Amended return” box.

Item C—Excepted Specified Foreign 

Financial Assets Reported

Check the box in item C only if the Form 3520 filer also files 

Form 8938 for the same tax year and includes this form in the 

total number of Forms 3520 reported on line 15 of Part IV, 

Excepted Specified Foreign Financial Assets, of Form 8938. 

For more information, see the Instructions for Form 8938, 

generally, and in particular, Duplicative reporting and the 

specific instructions for Part IV.

Identifying Information

Taxpayer identification numbers (TINs). Use social 

security numbers (SSNs) or individual taxpayer identification 

numbers (ITINs) to identify individuals. Use employer 

identification numbers (EINs) to identify estates, trusts, 

partnerships, and corporations. Don’t use an SSN in place of 

an EIN.

Applying for an EIN. If the foreign trust does not have an 

EIN, the trustee or the U.S. owner may apply for one online at 

IRS.gov/EIN. If the principal business was created or 

organized outside of the United States or U.S. territories, you 

may also apply for an EIN by calling 267-941-1099 (toll call).

Do not enter a preparer tax identification number 

(PTIN) in any entry space on Form 3520 other than 

the entry space for “PTIN” at the bottom of page 6 of 

the form.

Address. Include the room, suite, or other unit number after 

the street address. If the post office does not deliver mail to 

the street address and the U.S. person has a P.O. box, show 

the box number instead.

Foreign address. Do not abbreviate the country name.

Lines 1a and 1i. Line 1a identifies the person that is filing 

Form 3520. If you and your spouse are filing a joint Form 

3520, put your names and TINs in the same order as they 

appear on your Form 1040, U.S. Individual Income Tax 

Return, or Form 1040-SR, U.S. Tax Return for Seniors, and 

check the box on line 1i.

Line 1j. If an automatic 2-month extension applies for your 

tax return because you meet one of the following conditions, 

check the box and attach a statement to the Form 3520 

showing that you are a U.S. citizen or resident who meets 

one of these conditions.

• You live outside of the United States and Puerto Rico and 

your place of business or post of duty is outside the United 

States and Puerto Rico.

• You are in the military or naval service on duty outside the 

United States and Puerto Rico.

Line 1k. If you filed for an extension of time to file your 

income tax return, check the box on line 1k. Also, enter the 

tax form number of the original tax return that will be filed with 

the IRS.

Example. You file Form 4868, Application for Automatic 

Extension of Time To File U.S. Individual Income Tax Return, 

CAUTION

!

to extend the time to file your individual income tax return, 

Form 1040. Enter “1040” on the entry line.

Line 2b. Enter the EIN, if any, of the foreign trust. Do not 

enter an SSN or ITIN. Only EINs should be used to identify 

the foreign trust.

Line 3. If the foreign trust did not appoint a U.S. agent who 

can provide the IRS with all relevant trust information, check 

“No” and if you are required to complete Part I, complete lines 

15 through 18.

Lines 4a through 4f. If you are the executor of the estate of 

a U.S. citizen or resident, you must provide information about 

the decedent on lines 4a through 4e. You must also check the 

applicable box on line 4f to indicate which of the following 

applies: the U.S. decedent made a transfer to a foreign trust 

by reason of death, the U.S. decedent was treated as the 

owner of a portion of a foreign trust immediately prior to 

death, or the estate of the U.S. decedent included assets of a 

foreign trust.

Part I—Transfers by U.S. Persons to a 

Foreign Trust During the Current Tax 

Year

Complete Part I for information on a reportable event (defined 

earlier).

Note. Although the basic reporting requirements for Form 

3520 are contained in section 6048 (and are clarified by 

Notice 97-34), the reporting requirements have been clarified 

by the regulations under sections 679 and 684. Accordingly, 

the regulations under sections 679 and 684 should be 

referred to for additional clarification for transfers that are 

required to be reported in Part I of Form 3520.

Line 5a. Enter the name of the trust creator. If you are the 

trust creator, enter "Same as line 1a" on line 5a. If you are not 

the trust creator, enter the name of the person who created or 

originally settled the foreign trust.

Lines 5b and 5c. Enter the address and TIN, if any, of the 

trust creator. See Identifying Information, earlier, for specific 

information regarding the entering of addresses and TINs on 

Form 3520. If you are the trust creator, enter "Same as lines 

1c, 1e, 1f, 1g, and 1h" on line 5b, and enter "Same as line 1b" 

on line 5c.

Lines 6a and 6b. Enter the applicable two-letter country 

code from the list at IRS.gov/CountryCodes.

Lines 7 and 8. If you are reporting multiple transfers to a 

single foreign trust and the answers to line 7 or 8 are different 

for various transfers, complete a separate line for each 

transfer on duplicate copies of the relevant pages of the form.

Lines 7a and 7b. Check “Yes” if you are treated as a U.S. 

owner of any portion of the foreign trust under the grantor 

trust rules (sections 671 through 679) and complete line 7b 

and Part II of this form. In addition, if another person is 

treated as an owner of the transferred assets, you must 

comply with the reporting requirements that would apply to a 

direct transfer to that other person. For example, if that other 

person is a foreign partnership, you must comply with the 

reporting requirements for transfers to foreign partnerships. 

See Form 8865, Return of U.S. Persons With Respect to 

Certain Foreign Partnerships.

Line 8. If the transfer was a completed gift (see Regulations 

section 25.2511-2), you may have to file Form 709, United 

Instructions for Form 3520 (Rev. 12-2023) -7-
States Gift (and Generation-Skipping Transfer) Tax Return. If 

the transfer was a bequest, you may have to file Form 706, 

U.S. Estate Tax Return.

Line 9. See U.S. Beneficiary, earlier.

Schedule A—Obligations of a Related Trust

Complete the applicable portions of Schedule A with respect 

to all transfers to a related foreign trust in exchange for an 

obligation of the trust or a person related to the trust that took 

place during the current tax year.

Line 11. For additional information, see Obligation, Qualified 

Obligation, and Person related to a foreign trust, earlier.

Line 12. If you answered "Yes" to the question on line 11b 

with respect to any obligation, you must generally answer 

“Yes” to the question on line 12. By so doing, you agree to 

extend the period of assessment of any income or transfer 

tax attributable to the transfer and any consequential income 

tax changes for each year that the obligation is outstanding to 

a date 3 years after the maturity date of the obligation. You 

have the right to refuse to extend the period of assessment. 

Pub. 1035, Extending the Tax Assessment Period, provides a 

more detailed explanation of your rights and the 

consequences of the choices you may make. When executed 

and filed, this form will be deemed to be agreed upon and 

executed by the IRS for purposes of Regulations section 

301.6501(c)-1(d).

Note. If you answer “No” to the question on line 12, you 

generally may not treat an obligation as a qualified obligation 

on line 11b. The one exception to this is if the maturity date of 

the obligation does not extend beyond the end of your tax 

year for which you are reporting and such obligation is paid 

within that tax year.

Schedule B—Gratuitous Transfers

Complete the applicable portions of Schedule B with respect 

to all reportable events (defined earlier) that took place during 

the current tax year.

Line 13. 

• In your column (b) description, indicate whether the 

property is tangible or intangible.

• You may aggregate transfers of cash during the year on a 

single line of line 13.

• If there is not enough space on the form, attach a 

statement.

• For transfers reported on statements, you must enter 

“Statement” on one of the lines in column (b), and enter the 

total amount of transfers reported on the statement on 

line 13, columns (c), (d), (e), (f), (h), and (i).

Note. Penalties may be imposed for failure to report all 

required information. See Penalties, earlier.

Line 13, column (d). Enter the U.S. adjusted basis of the 

property transferred.

Line 13, column (e). Only include gain that is immediately 

recognized at the time of the transfer.

Note. Any transfer of appreciated assets by a U.S. person to 

a foreign nongrantor trust is treated as a sale or exchange 

and the transferor must recognize as gain the excess of the 

FMV of the transferred property over its adjusted basis. This 

rule applies to a domestic trust that becomes a foreign trust, 

provided that the foreign trust is not a grantor trust. The 

domestic trust is treated as having transferred all of its assets 

to the foreign trust immediately prior to becoming a foreign 

trust. Although the gain is not recognized on Form 3520, it 

must be reported on the appropriate form or schedule of the 

transferor's income tax return. See section 684. The transfer 

of assets, however, is reported on Part I of this Form 3520.

Line 13, column (f). Generally, if the reported transaction is 

a sale, you should report the gain on the appropriate form or 

schedule of your income tax return.

Lines 15 through 18. If you checked “No” on line 3, 

acknowledging that the foreign trust did not appoint a U.S. 

agent who can provide the IRS with all relevant trust 

information, and you are required to complete Part I, 

complete lines 15 through 18.

Line 15. Enter the name; address; whether the person is a 

U.S. beneficiary (defined earlier); and TIN, if any, of all 

reportable beneficiaries. Include specified beneficiaries, 

classes of discretionary beneficiaries, and names or classes 

of any beneficiaries that could be named as additional 

beneficiaries. If there is not enough space on the form, attach 

a statement.

Line 17. Enter the name; address; and TIN, if any, of any 

person, other than those listed on line 16, that has significant 

powers over the trust (for example, “protectors,” “enforcers,” 

any person that must approve trustee decisions or otherwise 

direct trustees, any person with a power of appointment, any 

person with powers to remove or appoint trustees, etc.). 

Include a description of each person's powers. If there is not 

enough space, attach a statement.

Line 18. Attach a copy of the following documents. If these 

documents have been previously attached to a Form 3520-A 

or Form 3520 filed within the previous 3 years, attach only 

relevant updates.

• A summary of the terms of the trust that includes a 

summary of any oral agreements or understandings you have 

with the trustee, whether or not legally enforceable.

• A copy of all trust documents (and any revisions), including 

the trust instrument, any memoranda of wishes prepared by 

the trustees summarizing the settlor's wishes, any letter of 

wishes prepared by the settlor summarizing the wishes, and 

any similar documents.

• A copy of the trust's financial statements, including a 

balance sheet and an income statement similar to those 

shown on Form 3520-A. These financial statements must 

reasonably reflect the trust's accumulated income under U.S. 

income tax principles. For example, the statements must not 

treat capital gains as additions to trust corpus.

• A copy of the trust’s organizational chart, including 

ownership structure and percentage of ownership.

Schedule C—Qualified Obligations Outstanding 

in the Current Tax Year

Line 19. Provide information on the status of outstanding 

obligations of the related foreign trust (or an obligation of a 

person related to the foreign trust) that you reported as a 

qualified obligation in the current tax year. This information is 

required in order to retain the obligation's status as a qualified 

obligation. If relevant, attach a statement describing any 

changes in the terms of the qualified obligation.

If the obligation fails to retain the status of a qualified 

obligation, you will be treated as having made a gratuitous 

transfer to the foreign trust, which must be reported on 

Schedule B of this Part I in the year the obligation fails to 

-8- Instructions for Form 3520 (Rev. 12-2023)
meet the criteria for a qualified obligation. See section III.C.2 

of Notice 97-34.

Part II—U.S. Owner of a Foreign Trust

Complete Part II if you are considered the owner of any 

assets of a foreign trust under the rules of sections 671 

through 679 during the tax year. You are required to enter an 

EIN for such foreign trust on line 2b on page 1 of the form.

Note. Complete Part II even if there have been no 

transactions involving the trust during the tax year. You may 

also need to complete Part III if you receive a distribution from 

the foreign trust. See the instructions for Part III.

Line 20. Enter information regarding any person, including 

yourself, who is considered the owner of any portion of the 

trust under the rules of sections 671 through 679. Also, enter 

in column (e) the specific Code section that causes you or 

any other person (as applicable) to be considered an owner 

for U.S. income tax purposes. See the grantor trust rules 

under sections 671 through 679.

Lines 21a and 21b. Enter the applicable two-letter code 

from the list at IRS.gov/CountryCodes.

Line 22. If “Yes,” the copy of the Foreign Grantor Trust 

Owner Statement (pages 3 and 4 of Form 3520-A) should 

show the amount of the foreign trust's income that is 

attributable to you for U.S. income tax purposes. See 

section IV of Notice 97-34.

If “No,” to the best of your ability, complete and attach a 

substitute Form 3520-A for the foreign trust to your Form 

3520 by the due date of your Form 3520 (and not the due 

date for the Form 3520-A). Otherwise, you may be liable for a 

penalty equal to the greater of $10,000 or 5% of the gross 

value of the portion of trust assets that you are treated as 

owning. There are additional penalties for continuing failure 

to file after notice by the IRS. See section 6677(a) through 

(c). Also see Penalties, earlier.

Line 23. Enter the FMV of the trust assets that you are 

treated as owning. Include all assets at FMV as of the end of 

the tax year. For this purpose, disregard all liabilities. The 

trust should send you this information in connection with its 

Form 3520-A. If you did not receive such information (line 9 of 

the Foreign Grantor Trust Owner Statement) from the trust, 

complete line 23 to the best of your ability. At a minimum, 

include the value of all assets that you have transferred to the 

trust. Also, use Form 8082 to notify the IRS that you did not 

receive a Foreign Grantor Trust Owner Statement. However, 

filing Form 8082 does not relieve you of any penalties that 

may be imposed under section 6677. See Penalties, earlier.

Part III—Distributions to a U.S. Person 

From a Foreign Trust During the 

Current Tax Year

If you received an amount from a portion of a foreign trust of 

which you are treated as the owner, complete lines 24 and 27 

in Part III. If you received an amount from a foreign trust that 

would require a report under both Parts III and IV (gifts or 

bequests) of Form 3520, report the amount only in Part III.

Line 24. Report any cash or the FMV of other property that 

you received (actually or constructively, directly or indirectly) 

from a foreign trust during the current tax year, whether or not 

taxable, unless the amount is a loan to you from the trust or 

constitutes uncompensated use of trust property, both of 

which must be reported on line 25. For example, if you are a 

partner in a partnership that receives a distribution from a 

foreign trust, you must report your allocable share of such 

payment as an indirect distribution from the trust.

Line 24, column (c). The filer is permitted to enter the 

basis of the property in the hands of the beneficiary (as 

determined under section 643(e)(1)), if lower than the FMV of 

the property, but only if the taxpayer is not required to 

complete Schedule A (lines 31 through 38) due to lack of 

documentation. For these purposes, lack of documentation 

refers to a situation in which the filer checked “No” on line 29 

or 30 because (a) the beneficiary did not receive a Foreign 

Grantor Trust Beneficiary Statement or a Foreign Nongrantor 

Trust Beneficiary Statement from the trust, or (b) such 

statement did not contain all of the items specified under the 

instructions for line 29 or 30, later.

Line 25. If you or a U.S. person related to you received a 

loan of cash or marketable securities, directly or indirectly, 

from a related foreign trust, or the uncompensated use of 

trust property (defined later), the amount of such loan or the 

FMV of the use of trust property will be treated as a 

reportable distribution, whether or not taxable. For this 

purpose, a loan to you by an unrelated third party that is 

guaranteed by a foreign trust is generally treated as a loan 

from the trust.

Line 25, column (e). Answer “Yes” if an obligation given 

in exchange for the loan is a qualified obligation (defined 

earlier).

Line 25, column (f). The FMV of an obligation is zero 

unless it is a qualified obligation. Therefore, in the case of 

obligations that are not qualified obligations, enter “-0-” in 

column (f).

Uncompensated use of trust property. If you or a U.S. 

person related to you, directly or indirectly, used any property 

of a foreign trust, the FMV of such use will be treated as a 

reportable distribution whether or not taxable. Report the 

FMV of the use of trust property in column (a) and the date of 

first use in column (b), skip columns (c) through (e), report 

the amount paid for such use in column (f), and enter the 

amount treated as a taxable distribution from the trust in 

column (g) by subtracting column (f) from column (a). See 

section 643(i) for more information.

Note. Under the HIRE Act, effective after March 18, 2010, if 

a foreign trust with a U.S. transferor is not already treated as 

a grantor trust under the rules of sections 671 through 679, 

the foreign trust will be treated as having acquired a U.S. 

beneficiary, and will therefore be treated as a grantor trust, if it 

makes a loan of cash or marketable securities, directly or 

indirectly, to a U.S. person or allows a U.S. person, directly or 

indirectly, to use trust property, and the U.S. person does not 

repay the loan at a market rate of interest or pay the trust the 

FMV of the use of the property within a reasonable period of 

time. Accordingly, the loan or use of trust property will not be 

treated as a taxable distribution under section 643(i) but will 

remain reportable on Part III of this Form 3520.

Line 26. See Line 12, earlier, except that “line 25, column 

(e)” should replace “line 11b,” and “line 26” should replace 

“line 12.”

Line 27. Penalties may be imposed for failure to accurately 

report all distributions received during the current tax year. 

See Penalties, earlier.

Line 28. Provide information on the status of any 

outstanding obligation to the foreign trust that you reported as 

a qualified obligation in the current tax year. This information 

Instructions for Form 3520 (Rev. 12-2023) -9-
is required in order to retain the obligation's status as a 

qualified obligation. If relevant, attach a statement describing 

any changes to the terms of the qualified obligation. If the 

obligation fails to retain the status of a qualified obligation, 

you will be treated as having received a taxable distribution 

under section 643(i) from the foreign trust. See section V.A of 

Notice 97-34.

Lines 29 and 30. If any of the items required for the Foreign 

Grantor Trust Beneficiary Statement (see Line 29, later) or for 

the Foreign Nongrantor Trust Beneficiary Statement (see 

Line 30, later) is missing, you must check “No” on line 29 or 

line 30, as applicable.

Also, if you answer “Yes” to line 29 or line 30, and the 

foreign trust or U.S. agent does not produce records or 

testimony when requested or summoned by the IRS, the IRS 

may redetermine the tax consequences of your transactions 

with the trust and impose appropriate penalties under section 

6677. See section 6048(c)(2)(A).

Note. If the question on line 29 or 30 is not applicable, check 

the “N/A” box.

Line 29. If “Yes,” attach the Foreign Grantor Trust Beneficiary 

Statement (page 5 of Form 3520-A) from the foreign trust and 

do not complete the rest of Part III with respect to the 

distribution. If a U.S. beneficiary receives a complete Foreign 

Grantor Trust Beneficiary Statement with respect to a 

distribution during the tax year, the beneficiary should treat 

the distribution for income tax purposes as if it came directly 

from the owner. For example, if the distribution is a gift, the 

beneficiary should not include the distribution in gross 

income.

In addition to basic identifying information (that is, name, 

address, TIN, etc.) about the foreign trust and its trustee, this 

statement must contain these items.

1. The first and last day of the tax year of the foreign trust 

to which this statement applies.

2. An explanation of the facts necessary to establish that 

the foreign trust should be treated for U.S. tax purposes as 

owned by another person. (The explanation should identify 

the Code section that treats the trust as owned by another 

person.)

3. A statement identifying whether the owner of the trust 

is an individual, trust, corporation, or partnership.

4. A description of property (including cash) distributed or 

deemed distributed to the U.S. person during the tax year, 

and the FMV of the property distributed.

5. A statement that the trust will permit either the IRS or 

the U.S. beneficiary to inspect and copy the trust's 

permanent books of account, records, and such other 

documents that are necessary to establish that the trust 

should be treated for U.S. tax purposes as owned by another 

person. This statement is not necessary if the trust has 

appointed a U.S. agent.

6. A statement as to whether the foreign trust has 

appointed a U.S. agent (defined earlier). If the trust has a 

U.S. agent, include the name, address, and TIN of the agent.

If a foreign nongrantor trust, check "N/A."

Line 30. If “Yes,” attach the Foreign Nongrantor Trust 

Beneficiary Statement from the foreign trust. A Foreign 

CAUTION

!

Nongrantor Trust Beneficiary Statement must include the 

following items.

1. An explanation of the appropriate U.S. tax treatment of 

any distribution or deemed distribution for U.S. tax purposes, 

or sufficient information to enable the U.S. beneficiary to 

establish the appropriate treatment of any distribution or 

deemed distribution for U.S. tax purposes.

2. A statement identifying whether any grantor of the trust 

is a partnership or a foreign corporation. If so, attach an 

explanation of the relevant facts.

3. A statement that the trust will permit either the IRS or 

the U.S. beneficiary to inspect and copy the trust's 

permanent books of account, records, and such other 

documents that are necessary to establish the appropriate 

treatment of any distribution or deemed distribution for U.S. 

tax purposes. This statement is not necessary if the trust has 

appointed a U.S. agent.

4. The Foreign Nongrantor Trust Beneficiary Statement 

must also include items (1), (4), and (6), as listed in the 

Line 29 instructions, earlier, as well as basic identifying 

information (for example, name, address, TIN, etc.) about the 

foreign trust and its trustee.

If a foreign grantor trust, check "N/A."

Schedule A—Default Calculation of Trust 

Distributions

If you answered “Yes” to line 30, you may complete either 

Schedule A or Schedule B. Generally, however, if you 

complete Schedule A in the current year (or did so in prior 

years), you must continue to complete Schedule A for all 

future years, even if you are able to answer “Yes” to line 30 in 

that future year. (The only exception to this consistency rule 

is that you may use Schedule B in the year that a trust 

terminates, but only if you are able to answer “Yes” to line 30 

in the year of termination.)

Line 32. To the best of your knowledge, state the number of 

years the trust has been in existence as a foreign trust and 

attach an explanation of your basis for this statement. 

Consider any portion of a year to be a complete year. If this is 

the first year that the trust has been a foreign trust, do not 

complete the rest of Part III (you do not have an accumulation 

distribution).

Line 33. Enter the total amount of distributions that you 

received during the 3 preceding tax years (or the number of 

years the trust has been a foreign trust if fewer than 3 years). 

For example, if a trust distributed $50 in year 1, $120 in year 

2, and $150 in year 3, the amount reported on line 33 would 

be $320 ($50 + $120 + $150).

Line 35. Divide line 34 by 3.0 (or the number of years the 

trust has been a foreign trust if fewer than 3 years). Consider 

any portion of a year to be a complete year. For example, a 

foreign trust created on July 1, 2021, would be treated on a 

2023 calendar year return as having 2 preceding years (2021 

and 2022). In this case, you would calculate the amount on 

line 35 by dividing line 34 by 2.0. Do not disregard tax years 

in which no distributions were made. The IRS will consider 

your proof of these prior distributions as adequate records to 

demonstrate that any distribution up to the amount on line 31 

is not an accumulation distribution in the current tax year.

CAUTION

!

-10- Instructions for Form 3520 (Rev. 12-2023)
Line 36. Enter this amount as ordinary income on your tax 

return. Report this amount on the appropriate schedule of 

your tax return (for example, Schedule E (Form 1040), Part 

III).

Line 37. If there is an amount on line 37, you must also 

complete line 38 and Schedule C—Calculation of Interest 

Charge to determine the amount of any interest charge you 

may owe.

Schedule B—Actual Calculation of Trust 

Distributions

You may only use Schedule B if:

• You answered “Yes” to line 30,

• You attach a copy of the Foreign Nongrantor Trust 

Beneficiary Statement to this return, and

• You have never before used Schedule A for this foreign 

trust or this foreign trust terminated during the tax year.

Line 40a. Enter on line 40a the amount received by you from 

the foreign trust that is treated as ordinary income of the trust 

in the current tax year. Ordinary income is all income that is 

not capital gains. Report this amount on the appropriate 

schedule of your tax return (for example, Schedule E (Form 

1040), Part III).

Lines 42a through 42d. Enter on these lines the applicable 

amounts received by you from the foreign trust that are 

treated as capital gain income of the trust in the current tax 

year. Report these amounts on the appropriate schedule of 

your tax return (for example, Schedule D (Form 1040)).

Line 45. Enter the foreign trust's aggregate undistributed net 

income (UNI). For example, assume that a trust was created 

in 2015 and has made no distributions prior to 2021. Assume 

the trust's ordinary income was $0 in 2020, $60 in 2019, $124 

in 2018, $87 in 2017, $54 in 2016, and $25 in 2015. Thus, for 

2021, the trust's UNI would be $350. If the trust earned $100 

and distributed $200 during 2021 (so that $100 was 

distributed from accumulated earnings), the trust's 2022 

aggregate UNI would be $250 ($350 + $100 − $200).

Line 46. Enter the foreign trust's weighted undistributed net 

income (weighted UNI). The trust's weighted UNI is its 

accumulated income that has not been distributed, weighted 

by the years that it has accumulated income. To calculate 

weighted UNI, multiply the undistributed income from each of 

the trust's years by the number of years since that year, and 

then add each year's result. Using the example from line 45, 

the trust's weighted UNI in 2021 would be $1,260, calculated 

as follows.

Year

No. of 

years 

since that 

year

UNI from 

each year Weighted UNI

2020 1 $ 0 $ 0

2019 2 60 120

2018 3 124 372

2017 4 87 348

2016 5 54 270

2015 6 25 150

TOTAL $350 $1,260

To calculate the trust's weighted UNI for 2022, the trust 

could update this calculation, or the weighted UNI shown on 

line 46 of the 2021 Form 3520 could simply be updated using 

the following steps.

1. Begin with the 2021 weighted UNI.

2. Add UNI at the beginning of 2021.

3. Add trust earnings in 2021.

4. Subtract trust distributions in 2021.

5. Subtract weighted trust accumulation distributions in 

2021. (Weighted trust accumulation distributions are the trust 

accumulation distributions in 2021 multiplied by the 

applicable number of years from 2021.)

Using the example above, the trust's 2022 weighted UNI 

would be $1,150, calculated as follows.

2021 weighted UNI ..................... $1,260

UNI at beginning of 2021 ................. + 350

Trust earnings in 2021 ................... + 100

Trust distributions in 2021 ................ − 200

Weighted trust accumulation distributions in 2021

 ($100 X 3.6) ....................... – 360

2022 weighted UNI ..................... $1,150

Line 47. Calculate the trust's applicable number of years by 

dividing line 46 by line 45. This would be the weighted UNI 

divided by the annual UNI. Using the examples in the 

instructions for lines 45 and 46, the trust's applicable number 

of years would be 3.6 (1,260/350) in 2021 and 4.6 

(1,150/250) in 2022.

Note. Include as many decimal places as there are digits in 

the UNI on line 45 (for example, using the example in the 

instructions for line 45, include three decimal places).

Schedule C—Calculation of Interest Charge

Complete Schedule C if you entered an amount on line 37 or 

line 41a.

Line 49. Include the amount from line 48 of this form on 

line 1 of Form 4970, Tax on Accumulation Distribution of 

Trusts. Then, compute the tax on the total accumulation 

distribution using lines 1 through 28 of Form 4970. Enter on 

line 49 the tax from line 28 of Form 4970.

Note. Use Form 4970 as a worksheet and attach it to Form 

3520.

Line 51. Interest accumulates on the tax (line 49) for the 

period beginning on the date that is the applicable number of 

years (as rounded on line 50) prior to the applicable date and 

ending on the applicable date. For purposes of making this 

interest calculation, the applicable date is the date that is 

mid-year through the tax year for which reporting is made (for 

example, in the case of a 2023 calendar-year taxpayer, the 

applicable date would be June 30, 2023). Alternatively, if you 

received only a single distribution during the tax year that is 

treated as an accumulation distribution, you may use the date 

of that distribution as the applicable date.

For portions of the interest accumulation period that are 

prior to 1996 (and after 1976), interest accumulates at a 

simple rate of 6% annually, without compounding. For 

portions of the interest accumulation period that are after 

1995, interest is compounded daily at the rate imposed on 

underpayments of tax under section 6621(a)(2). This 

compounded interest for periods after 1995 is imposed not 

Instructions for Form 3520 (Rev. 12-2023) -11-
only on the tax, but also on the total simple interest 

attributable to pre-1996 periods.

If you are a calendar-year taxpayer and you use June 30 of 

the calendar year as the applicable date for calculating 

interest, use the table found on IRS.gov/

CombinedInterestRate to determine the combined interest 

rate and enter it on line 51. If you are not a calendar-year 

taxpayer or you choose to use the actual date of the 

distribution as the applicable date, calculate the combined 

interest rate using the above principles and enter it on line 51.

Line 53. Report this amount as additional tax (ADT) on the 

appropriate line of your income tax return (for example, for 

Form 1040 filers, include this amount as part of the total for 

the "Any other taxes" line on Schedule 2 (Form 1040)).

Part IV—U.S. Recipients of Gifts or 

Bequests Received During the 

Current Tax Year From Foreign 

Persons

Note. If you fail to timely report foreign gifts that should be 

reported under section 6039F, the IRS may determine the 

income tax consequences of the receipt of such gift and 

penalties may be imposed. See Penalties, earlier.

A gift to a U.S. person does not include any amount paid 

for qualified tuition or medical payments made on behalf of 

the U.S. person.

If a foreign trust makes a distribution to a U.S. person, the 

U.S. person must report the amount as a distribution in Part 

III, rather than as a gift in Part IV.

Contributions of property by foreign persons to domestic 

or foreign trusts that have U.S. beneficiaries are not 

reportable by those beneficiaries in Part IV unless they are 

treated as receiving the contribution in the year of the transfer 

(for example, if the U.S. beneficiary is treated as an owner of 

that portion of the trust under section 678, then the 

contribution must be reported by such U.S. beneficiary in Part 

IV).

A domestic trust that is not treated as owned by another 

person is required to report the receipt of a contribution to the 

trust from a foreign person as a gift in Part IV.

A domestic trust that is treated as owned by a foreign 

person is not required to report the receipt of a contribution to 

the trust from a foreign person. However, a U.S. person 

should report the receipt of a distribution from a domestic 

trust that is treated as owned by a foreign person as a gift 

from a foreign person in Part IV, rather than as a distribution 

to a U.S. person in Part III.

Line 54. To calculate the threshold amount ($100,000), you 

must aggregate gifts from different foreign nonresident aliens 

and foreign estates if you know (or have reason to know) that 

those persons are related to each other (see Related Person, 

earlier) or one is acting as a nominee or intermediary for the 

other. For example, if you receive a gift of $75,000 from Abby 

(a nonresident alien individual) and a gift of $40,000 from 

Brian (a nonresident alien individual), and you know that 

Abby and Brian are related, you must answer “Yes” and 

complete columns (a) through (c) for each gift.

If you answered “Yes” to the question on line 54 and none 

of the gifts or bequests received exceeds $5,000, do not 

complete columns (a) through (c) of line 54. Instead, enter in 

column (b) of the first line, “No gifts or bequests exceed 

$5,000.”

Line 55. Answer “Yes” if you received aggregate amounts in 

excess of the section 6039F threshold amount during the 

current tax year that you treated as gifts from foreign 

corporations or foreign partnerships (or any foreign persons 

that you know (or have reason to know) are related to such 

foreign corporations or foreign partnerships). The threshold 

amount is available at IRS.gov/Newsroom/Inflation-AdjustedTax-Items-by-Tax-Year. Select the applicable tax year news 

release, then click on the Rev. Proc. link and search for 

section 6039F to see the threshold amount under Notice of 

Large Gifts Received from Foreign Persons.

For example, if you, a calendar-year taxpayer during 2023, 

received $8,000 from Xander Corp (a foreign corporation) 

that you treated as a gift, and $15,000 that you received from 

Allison (a nonresident alien) that you treated as a gift, and 

you know that Xander Corp is wholly owned by Allison, you 

must complete columns (a) through (g) for each gift.

Note. Gifts from foreign corporations or foreign partnerships 

are subject to recharacterization by the IRS under section 

672(f)(4).

Line 56. If you answered “Yes” to the question on line 56 and 

the ultimate donor on whose behalf the reporting donor is 

acting is a foreign corporation or foreign partnership, attach 

an explanation including the ultimate foreign donor's name; 

address; TIN, if any; and status as a corporation or 

partnership.

If the ultimate donor is a foreign trust, treat the amount 

received as a distribution from a foreign trust and complete 

Part III.

Privacy Act and Paperwork Reduction Act Notice. We 

ask for the information on this form to carry out the Internal 

Revenue laws of the United States. You are required to give 

us the information. We need it to ensure that you are 

complying with these laws and to allow us to figure and 

collect the right amount of tax.

Our authority to ask for information is sections 6001, 6011, 

and 6012(a) and their regulations, which require you to file a 

return or statement with us for any tax for which you are 

liable. Your response is mandatory under these sections. 

Section 6109 requires you to provide your TIN. You must fill in 

all parts of the tax form that apply to you.

You are not required to provide the information requested 

on a form that is subject to the Paperwork Reduction Act 

unless the form displays a valid OMB control number. Books 

or records relating to a form or its instructions must be 

retained as long as their contents may become material in the 

administration of any Internal Revenue law. Generally, tax 

returns and return information are confidential, as required by 

section 6103. However, section 6103 allows or requires the 

IRS to disclose or give the information shown on your tax 

return to others as described in the Code. For example, we 

may disclose your tax information to the Department of 

Justice to enforce the tax laws, both civil and criminal, and to 

cities, states, the District of Columbia, and U.S. 

commonwealths or possessions to carry out their tax laws. 

We may also disclose this information to other countries 

under a tax treaty, to federal and state agencies to enforce 

federal nontax criminal laws, or to federal law enforcement 

and intelligence agencies to combat terrorism. Failure to 

provide this information, or providing false information, may 

subject you to fines or penalties.

-12- Instructions for Form 3520 (Rev. 12-2023)
Keep this notice with your records. It may help you if we 

ask you for other information.

The time needed to complete and file this form and related 

schedules will vary depending on individual circumstances. 

The estimated burden for individual taxpayers filing this form 

is approved under OMB control number 1545-0074 and is 

included in the estimates shown in the instructions for their 

individual income tax return. The estimated burden for all 

other taxpayers who file this form is shown below.

Recordkeeping ...................... 42 hr., 34 min.

Learning about the law or the form......... 4 hr., 50 min.

Preparing the form ................... 6 hr., 40 min.

Sending the form to the IRS ............. 16 min.

If you have comments concerning the accuracy of these 

time estimates or suggestions for making this form simpler, 

we would be happy to hear from you. You can send us 

comments from IRS.gov/FormComments. Or you can send 

your comments to Internal Revenue Service, Tax Forms and 

Publications Division, 1111 Constitution Ave. NW, IR-6526, 

Washington, DC 20224. Do not send the tax form to this 

office. Instead, see When and Where To File, earlier.

Instructions for Form 3520 (Rev. 12-2023) -13-