Form 3520-A (2019) Checklist
Overview and Reporting Obligation
The IRS requires trustees of foreign trusts with U.S. owners to file Form 3520-A annually under IRC §6048(b) to report 2019 income, distributions, and assets. This form provides critical information about the trust's financial activities and ensures U.S. owners can meet their tax reporting obligations.
The trustee must file by the 15th day of the 3rd month after the trust's tax year ends and must separately identify distributions to U.S. owners versus beneficiaries. Each U.S. person treated as an owner of any portion of a foreign trust under the grantor trust rules remains responsible for ensuring the foreign trust files Form 3520-A and furnishes required annual statements.
Filing Requirements and Initial Setup
Verify Trust Classification and U.S. Agent Appointment
Determine whether the foreign trust appointed a U.S. agent under the instructions. If no agent was appointed, you must attach complete trust documents, including the original instrument, summaries, amendments, and letters of wishes.
You may attach only relevant 2019 updates if these documents were attached to a Form 3520-A filed within the prior 3 years. A U.S. agent must have a binding contract with the trust allowing the IRS to examine records or produce testimony related to proper U.S. tax treatment.
Complete General Information Section
Enter the calendar year 2019 or the specific tax year beginning and ending dates for the foreign trust. Include the trust's EIN on line 1b(1). A reference ID number is required on line 1b(2) only if no EIN was entered, though you may enter both an EIN and a reference ID number. The reference ID number must be alphanumeric with no special characters or spaces and limited to 50 characters in length.
Distribution Reporting and Income Statements
Report All Distributions on Lines 17b and 17c
Separately list each distribution to U.S. owners on line 17b and U.S. beneficiaries on line 17c by name, identification number, distribution date, and fair market value as of the 2019 distribution date. The trustee must distinguish between distributions and loans and exclude loans treated as qualified obligations under Treasury Regulations §1.679-4(d). You must attach additional statements if more space is needed to list all distributions.
Prepare Balance Sheet and Income Information
Complete Part III by entering the beginning-of-year (January 1, 2019) and end-of-year (December 31, 2019) fair market values for all asset categories. These categories include:
- Cash and accounts receivable
- Securities and government obligations
- Real property and depreciable assets
- Mortgages, notes receivable, and inventories
Verify that total liabilities and net worth equal total assets for both dates.
Complete Income and Expense Reporting
Report 2019 income and expenses itemized by type in Part II. The items include:
- Interest income, including taxable and tax-exempt amounts
- Dividends, including ordinary and qualified dividends
- Capital gains and ordinary gains
- Rents, royalties, and partnership income
- Interest expense and foreign taxes
- Trustee fees and charitable contributions
All amounts must be converted to U.S. dollars using the exchange rate on each transaction date or a consistent rate permitted by the instructions.
Owner and Beneficiary Statements
Create Separate Owner Statements
For each U.S. owner treated as owning a portion of the trust under IRC §671 through 679 for 2019, complete a separate Foreign Grantor Trust Owner Statement on pages 3 and 4. Each statement must include the owner's name, identification number, the gross value of the owned portion as of 2019 year-end, and distributions received during 2019.
Attach a factual and legal explanation establishing ownership under the applicable IRC sections. The U.S. owner must attach this statement to Form 3520 for 2019 tax reporting.
Prepare Beneficiary Statements
For each U.S. beneficiary that received a distribution during 2019, complete a separate Foreign Grantor Trust Beneficiary Statement on page 5. List distributions, loans, or property use by date, description, and fair market value as of the 2019 distribution date.
Loans treated as qualified obligations under Treasury Regulations §1.679-4(d) must be excluded from the statement. Trustees must send a copy to each beneficiary and include an explanation of the legal basis for trust ownership.
Certification and Professional Preparer Requirements
The trustee must sign Part I and each attached statement under penalties of perjury, certifying that the 2019 return is true, correct, and complete. If a paid preparer completed the form, include the preparer's name, signature, date, PTIN, firm name, EIN, and phone number. The paid preparer must sign the return in the space provided for the preparer's signature and give a copy of the return to the filer.
Special Reporting Considerations
Excepted Specified Foreign Financial Assets
Check the excepted specified foreign financial assets box only if a U.S. person treated as the owner of any portion of the trust also files Form 8938 for the tax year. The owner must include this Form 3520-A in the total number of Forms 3520-A reported on line 2 of Part IV of Form 8938.
Transfer Reporting Requirements
If the trust transferred property to another person during the foreign trust's tax year, attach a statement providing detailed information. The statement must include the name and country of organization of the transferee, a description of the transfer and property, estimated fair market values, and consideration received. You must describe the trust ownership structure and all entities in which the trust has an ownership interest.
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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.
