Foreign Trusts and Completing Forms 3520 and 3520-A (Currently Unavailable)

Author: Carolyn Turnbull

This course reflects the tax law before the enactment of TCJA.

Careful attention must be paid when completing the rigorous tax filing obligations for U.S. persons with ties to foreign trusts, including the reporting of certain foreign trust transactions and the receipt of certain foreign gifts on Form 3520, Annual Return to Report Transactions with Foreign Trusts and Receipt of Certain Foreign Gifts. In addition, key U.S. reporting tax rules and classification issues for foreign trust arrangements unique to U.S. persons living abroad must be carefully managed as even small missteps can trigger an IRS audit.

Join noted international tax expert, Carolyn Turnbull, CPA, M.S.T. in this insightful CPE webinar as she reviews the fundamental U.S. reporting requirements for foreign trusts and the forms used to report information on U.S. ownership of a foreign trust, specific transfers of property to a foreign trust, distributions from a foreign trust, the receipt of gifts or bequests from foreign persons, and more.

Publication Date: November 2017

Designed For
Tax and accounting professionals responsible for cross-border tax compliance and planning; public practice CPAs, EAs, tax attorneys and other financial and wealth management advisors working with clients on international tax compliance and planning matters.

Topics Covered

• U.S. tax rules for foreign trusts, including persons who transfer property to a foreign trust and foreign trust beneficiaries
• How U.S. taxation of foreign trusts differs from the U.S. taxation of domestic trusts
• Classification issues for determining when a trust is a foreign trust
• Purpose and preparation of Forms 3520 and 3520-A
• Treatment of foreign gifts and bequests
• Potential IRS audit issues and triggers to avoid
• U.S. tax implications for foreign trusts
• U.S. classification of foreign trusts
• Special U.S. tax rules applicable to foreign trusts
• U.S. tax return forms for foreign trusts

Learning Objectives

• Discuss U.S. international tax reporting and compliance for foreign trusts
• Describe the steps required to properly file Forms 3520 and 3520-A
• Identify potential problem areas and pitfalls to avoid
• Identify a characteristic of a foreign grantor trust as it relates to U.S. tax implications
• Differentiate correct statements with respect to U.S. Classification of Foreign Trusts
• Describe exceptions to the recognition of gain on transfers of property by a U.S. person to foreign trust
• Recognize situations where an individual would be required to file Form 3520
• Identify schedules included in Part I of Form 3520 relates to qualified obligations outstanding in the current year
• Differentiate forms used to provide information about the foreign trust, its U.S. beneficiaries, and any U.S. person that is treated as an owner of any portion of the foreign trust
• Recognize tests that will be considered to be satisfied if U.S. persons control all substantial decisions affecting the trust and no foreign person acting in any capacity can overcome the decisions of the controlling U.S. persons
• Differentiate tax forms relates to tax on accumulated distributions of trusts
• Identify the amount a nonresident alien individual or a foreign estate that the U.S. person is treating as a gift or bequests is required to file Form 3520
• Differentiate correct statements with respect to the penalties for failure to file Form 3520
• Identify a reportable event with respect to Form 3520
• Describe Schedules in Part I of Form 3520 are used to report gratuitous transfers
• Recognize proper statements related to Part IV of Form 3520

Level
Intermediate

Instructional Method
Self-Study

NASBA Field of Study
Taxes (2 hours)

Program Prerequisites
Basic knowledge of U.S. international taxation principles

Advance Preparation
None