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A foreign trust is a grantor trust.

The trustee of a foreign grantor trust with a U.S. grantor must complete a 3520-A Form.  It is the ultimate legal duty of the U.S. grantor to file the form should the foreign trustee fail to file.

A Form 3520 is a four-page form with financial information about a foreign grantor trust.

Form 3520-A is required to account all of the trust activities, provide the name of the U.S. agent for the trust and to comply with the Internal Revenue Service. General accounting principles called “GAAP” must be used if there is any foreign investment.

The form is due within one year after the settler or settler’s spouse’s death, or on the 15th day of the third month after the end of the trust’s tax year or by March 15 for a trust with a calendar year.

There is a 5% penalty charged to the grantor based on all of the assets of the trust if the form is not filed.

Information Requirements for Form 3520-A

  • A complete accounting of all trust activities
  • The name of the U.S. Agent of the trust
  • Foreign Grantor Trust Owner Statement
  • Foreign Grantor Trust Beneficiary Statement
  • Other information relevant to the IRS

When does the trust NOT have the file Form 3520-A

  • If it is a foreign trust with an employment benefit plan, 402(b), 404(a)(4) or 404A
  • If it is a Canadian Registered Retirement Income Fund
  • If it is a Canadian Registered Education Plan
  • If it is a Mexican Trustmakers

A foreign foundation that acts like a trust will likely have to file a 3520-A

Other forms that you may have to file

  • Form 1041
  • Form 5471
  • Form TD F 90 22.1

You can find the forms on the IRS website