Form 3520-A (2022): Annual Information Return of Foreign Trust With a U.S. Owner
Form 3520-A Filing Obligations
Form 3520-A serves as the annual information return for foreign trusts with at least one U.S. owner, documenting trust income, distributions, and asset positions as required under IRC section 6048(b). U.S. persons treated as owners under the grantor trust rules in sections 671 through 679 must ensure the foreign trust files Form 3520-A and provides required annual statements to all U.S. owners and beneficiaries.
Filing Requirements and General Information
Complete Part I General Information with the foreign trust's name, EIN if assigned, creation date, and jurisdiction. Check the appropriate box to indicate Initial Return, Final Return, Amended Return, Extension Filed, or Substitute Form 3520-A.
If no U.S. agent was appointed, attach all trust documents, including the trust instrument, written and oral agreements, memoranda of wishes, variances, and organizational charts. You may attach only relevant updates if these documents were submitted with a Form 3520-A filed within the previous three years.
Prepare the required statements as follows:
- Prepare one owner statement per U.S. owner that the trust recognizes as owning a portion under IRC sections 671 through 679.
- Prepare one beneficiary statement per U.S. beneficiary who received any distribution, loan, or property use during the tax year.
Income Statement and Distribution Reporting
Complete Part II Foreign Trust Income Statement using books and records maintained by the trust. Report income categories as required:
- Report interest on line 1.
- Report dividends on line 2.
- Report gross rents and royalties on line 3.
- Report income from partnerships and fiduciaries on line 4.
- Separate capital gains into net short-term on line 5a and net long-term on line 5b.
- Enter ordinary gains or losses on line 6.
- Enter other income on line 7.
Deduct expenses as applicable:
- Deduct interest expense on line 9.
- Deduct foreign taxes on line 10a.
- Deduct state and local taxes on line 10b.
- Deduct depreciation and amortization on line 11.
- Deduct trustee and advisor fees on line 12.
- Deduct charitable contributions on line 13.
- Deduct other expenses on line 14.
Calculate net income or loss on line 16 by subtracting total expenses from total income.
Report distributions in Part II, line 17:
- Enter the fair market value of all distributions made directly or indirectly to any U.S. or foreign person in line 17a.
- Separately list in line 17b each U.S. owner receiving distributions with name, TIN, distribution date, and FMV on distribution date.
- Separately list in line 17c each U.S. beneficiary receiving distributions with the same data elements.
This separation ensures accurate reporting and prevents commingling of owner and beneficiary distributions.
Balance Sheet and Asset Reporting
Complete Part III Foreign Trust Balance Sheet for both the beginning and end of the tax year. List all assets, including cash, accounts receivable, mortgages and notes receivable, inventories, government obligations, marketable securities, nonmarketable securities, depreciable assets net of depreciation, real property, and other assets.
Calculate total assets on line 11 and ensure that the balance sheet reconciles with Part II net income and distributions. List liabilities, including accounts payable, contributions or gifts or grants payable, mortgages and notes payable, and other liabilities.
Report liabilities on lines 12 through 15 and calculate total liabilities on line 16. Report net worth by separating contributions to the trust corpus on line 17, accumulated trust income on line 18, and other items on line 19. Total net worth on line 20 must equal total assets minus total liabilities.
Foreign Grantor Trust Owner Statement Requirements
Prepare the Foreign Grantor Trust Owner Statement on pages 3 and 4 for each U.S. owner. Repeat the trust name, EIN, address, creation date, U.S. agent name and TIN if appointed, and trustee name and TIN in lines 1 through 4.
Complete line 5 with the trust's tax year first and last dates. Complete line 6 with the U.S. owner's name, TIN, and address.
Attach an explanation on line 7 detailing the applicable IRC section, such as section 671, 672, 673, 674, 675, or 676, that establishes the owner's deemed ownership status for U.S. tax purposes.
Report on line 9 the gross value of the trust portion deemed owned by the U.S. owner as of the last day of the foreign trust's tax year. Complete line 10 to report each cash or property distribution made directly or indirectly to the U.S. owner, excluding loans from this line as indicated in the form instructions.
Statement of Foreign Trust Income Attributable to U.S. Owner
Prepare the Statement of Foreign Trust Income Attributable to U.S. Owner on pages 4 and 5, with one statement per owner.
Allocate income items to the U.S. owner as follows:
- Allocate taxable interest on line 1a and tax-exempt interest on line 1b.
- Report total ordinary dividends on line 2a and qualified dividends on line 2b.
- Report rents and royalties on line 3.
- Report partnership and fiduciary income on line 4.
- Report capital gains and losses on line 5.
- Report ordinary gains and losses on line 6.
Allocate expenses to the U.S. owner, including interest expense, foreign taxes, state and local taxes, amortization and depreciation, trustee and advisor fees, charitable contributions, and other expenses.
The foreign trust may need to furnish to the U.S. owner additional information, including applicable statements, to ensure that the owner accurately reports income and expenses on the owner's U.S. income tax return. Each U.S. owner must receive this statement no later than the 15th day of the third month following the end of the trust's tax year.
Foreign Grantor Trust Beneficiary Statement
Prepare the Foreign Grantor Trust Beneficiary Statement on page five for each U.S. beneficiary who receives a distribution directly or indirectly from the foreign trust during the tax year. Include a copy of each statement with Form 3520-A and provide it to the beneficiary no later than the 15th day of the third month following the end of the trust's tax year, or later if an extension was granted or if filing a substitute Form 3520-A.
Each U.S. beneficiary must attach their copy to Form 3520. This statement documents all distributions received and enables proper reporting on the beneficiary's individual return.
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.
