Form 3520-A Checklist: Tax Year 2018
Reporting Obligations for Foreign Trusts with U.S. Owners
Form 3520-A reports annual income, distributions, and asset holdings of a foreign trust with a U.S. owner under IRC §6048(b). The Foreign Grantor Trust Owner Statement on pages 3 and 4 must separately report each U.S. owner's allocable trust income and qualified dividend treatment consistent with the pass-through characterization of capital gains and dividend income.
A foreign trust with a U.S. owner must file this form to satisfy the U.S. owner's annual information reporting obligations. Each U.S. person treated as an owner under the grantor trust rules (sections 671 through 679) remains responsible for ensuring the foreign trust files Form 3520-A and furnishes required statements to U.S. owners and beneficiaries.
Verification of Trust Status
You must verify that the trust qualifies as foreign under U.S. tax law, meaning it does not meet both domestic trust requirements. The trust must have at least one U.S. owner under §6048(b) during the reporting period. Document whether the tax year covered is calendar year 2018 or a fiscal year ending in 2018.
Part I: Trust Identification and U.S. Agent Appointment
Complete Part I by identifying the foreign trust with its name, employer identification number (if assigned), reference ID number, and complete contact information for the trustee and U.S. agent. Mark the appropriate box to indicate whether this represents an initial return, final return, or amended return.
Check the "excepted specified foreign financial assets" box only when a U.S. owner files Form 8938 and reports this Form 3520-A on line 2 of Part IV of that form. You must determine whether the trust appointed a U.S. agent authorized to furnish all relevant trust information to the IRS.
When no agent exists, attach copies of the trust instrument, all written and oral agreements, memoranda of wishes, and subsequent variances. The instructions allow you to reference documents previously filed within the prior three years rather than submitting duplicate copies.
Income and Distribution Reporting
Populate Part II using the trust's books and records to report all income from U.S. and foreign sources:
- Interest income on line 1
- Dividends on line 2
- Gross rents and royalties on line 3
- Partnership and fiduciary income on line 4
- Net short-term capital gains on line 5a and net long-term capital gains on line 5b
- Ordinary gains or losses on line 6
- Other income on line 7
Subtract allowable expenses, including foreign taxes, trustee fees, and charitable contributions, on lines 9 through 14 to calculate net income on line 16. Report the total fair market value of all distributions on line 17a.
Separately itemize distributions to U.S. owners on line 17b and to U.S. beneficiaries on line 17c with names, identification numbers, distribution dates, and fair market values. Attach a statement describing any property transfers during the year as required by line 5.
Balance Sheet and Statements
Complete Part III for both the beginning and end of tax year 2018. List all assets, including cash, receivables, securities, depreciable property, and real estate. Report all liabilities, including accounts payable, mortgages, and grants payable. Calculate total net worth to reconcile with total liabilities and net worth on the balance sheet.
Owner and Beneficiary Statements
Prepare a separate Foreign Grantor Trust Owner Statement (pages 3 and 4) for each U.S. owner. Include complete trust identification data, U.S. agent information when applicable, trustee details, owner's tax year, and owner identification. Attach an explanation citing the IRC sections establishing ownership status. Report the gross value of the owned portion on line 9 and all distributions or property transfers during 2018 on line 10 using the fair market value determined on distribution dates.
Complete a separate Statement of Foreign Trust Income Attributable to U.S. Owner (page 4) for each owner. This statement allocates pass-through income items, including taxable interest on line 1a, tax-exempt interest on line 1b, total ordinary dividends on line 2a, qualified dividends on line 2b, and capital gains on line 5. Report expenses according to the statement format.
Prepare a separate Foreign Grantor Trust Beneficiary Statement (page 5) for each U.S. beneficiary receiving distributions during 2018. Include trust and trustee identification, U.S. agent appointment status, and beneficiary name and identification number. Itemize all distributions, loans, and property use on line 7 with fair market values and descriptions of any property transferred in return.
Final Assembly and Submission Requirements
Verify all statements reference the correct trust tax year and include the trustee's signature, title, and date. Provide each U.S. owner and beneficiary with a copy of their respective statement and attach copies to Form 3520-A. Confirm all amounts appear in U.S. dollars and all information appears in English as required by the 2018 instructions.
The trustee must sign Form 3520-A under penalties of perjury on page 2. Obtain the paid preparer's signature, PTIN, firm EIN, and address when applicable. Assemble the complete form with required attachments, including trust documents (when no U.S. agent exists), all owner and beneficiary statements, and supporting schedules for income, expenses, and liabilities.
File the complete Form 3520-A with the Internal Revenue Service Center, P.O. Box 409101, Ogden, UT 84409, by the 15th day of the 3rd month after the end of the trust's tax year. Extensions may be obtained by filing Form 7004 before the original due date.
Need Help With Your Tax Filing?
If you’re missing tax documents or want to ensure the numbers you enter match IRS records, we can help.
We offer:
- Full IRS transcript retrieval (Wage & Income + Account)
- Professional tax form review
- Preparation & filing support
- Tax relief options if you owe the IRS
Call now before filing: (888) 260-9441
Fast transcript pull available
This checklist is for educational purposes only and does not constitute tax or legal advice. Always review official IRS instructions and consult a qualified professional for guidance.
