U. S. Business Income Tax Return

Instructions for Form 3520
(Rev. December 2025)

(Use with December 2023 revision of Form 3520.)
Annual Return To Report Transactions With Foreign Trusts and Receipt of Certain
Foreign Gifts
Section references are to the Internal Revenue Code
unless otherwise noted.

Future Developments
For the latest information about developments related to
Form 3520 and its instructions, such as legislation
enacted after they were published, go to IRS.gov/
Form3520.

What’s New
New guidance regarding the section 2801 tax.
Section 2801 imposes a tax on U.S. citizens and residents
who receive gifts or bequests from covered expatriates.
For more information, see IRS.gov/Businesses/GiftsFrom-Foreign-Person.

Reminders
Due dates. Form 3520 is due by the 15th day of the 4th
month following the end of the taxpayer’s tax year.
However, taxpayers who live and work outside the United
States have until the 15th day of the 6th month to file the
form. If an extension has been requested, check box 1k
and include the form number of the tax return for which the
extension applies. See When and Where To File, later.
Form 3520-A is due by the 15th day of the 3rd month
after the end of the foreign trust’s tax year. However, a
substitute Form 3520-A attached to a U.S. owner’s Form
3520 is due the same day as Form 3520. The U.S. owner
must check the “Substitute Form 3520-A” checkbox on the
top of Form 3520-A that is attached to Form 3520. See
Instructions for Form 3520-A.
Assessment period. If a complete Form 3520 is not filed
by the due date, including extensions, the time for
assessment of any tax imposed with respect to any event
or period to which the information required to be reported
in Parts I through III of such Form 3520 relates will not
expire before the date that is 3 years after the date on
which the required information is reported. See section
6501(c)(8).
Continuous-use revision. Use these instructions for tax
year 2025 and subsequent years until a superseding
revision is issued.

General Instructions
Purpose of Form

U.S. persons (and executors of estates of U.S. decedents)
file Form 3520 with the IRS to report:

Oct 7, 2025

• Certain transactions with foreign trusts,
• Ownership of foreign trusts under the rules of sections

671 through 679, and
• Receipt of certain large gifts or bequests from certain
foreign persons.
A separate Form 3520 must be filed for transactions
with each foreign trust.

Who Must File

File Form 3520 if any one or more of the following apply.
1. You are the responsible party for reporting a
reportable event that occurred during the current tax year,
or you are a U.S. person who transferred property
(including cash) to a related foreign trust (or a person
related to the trust) in exchange for an obligation or you
hold a qualified obligation from that trust that is currently
outstanding. For definitions, see Responsible Party,
Reportable Event, Qualified Obligation, and Person
related to a foreign trust, later.
Complete the identifying information on page 1 of the
form and the relevant portions of Part I. See the
instructions for Part I.
2. You are a U.S. person who, during the current tax
year, is treated as the owner of any part of the assets of a
foreign trust under the rules of sections 671 through 679.
U.S. person and owner are defined later.
Complete the identifying information on page 1 of the
form and Part II. See the instructions for Part II.
Note: You are required to complete Part II even if there
have been no transactions involving the trust during the
tax year. You may also be required to complete a
substitute Form 3520-A, Annual Information Return of
Foreign Trust With a U.S. Owner, and attach it to your
Form 3520. See Penalties, later.
3. You are a U.S. person (including a U.S. owner) or an
executor of the estate of a U.S. person who received,
directly or indirectly, a distribution from a foreign trust
during the current tax year; or you are a U.S. person who
is a U.S. owner or beneficiary of a foreign trust and in the
current tax year you or a U.S. person related to you
received (1) a loan of cash or marketable securities
(including an extension of credit) directly or indirectly from
such foreign trust, or (2) the uncompensated use of trust
property; or you are a U.S. person who is a U.S. owner or
beneficiary of a foreign trust and in the current tax year
such foreign trust holds an outstanding qualified obligation
of yours or a U.S. person related to you. For definitions,
see U.S. Person, Owner, Distribution, U.S. Beneficiary,
and Related Person, later.

Instructions for Form 3520 (Rev. 12-2025) Catalog Number 23068I
Department of the Treasury Internal Revenue Service www.irs.gov

Complete the identifying information on page 1 of the
form and Part III. In the case of a U.S. person that is an
estate, check “Executor” on line B on page 1. See the
instructions for Part III.
4. You are a U.S. person who, during the current tax
year, received either:
a. More than $100,000 from a nonresident alien
individual or a foreign estate (including foreign persons
related to that nonresident alien individual or foreign
estate) that you treated as gifts or bequests; or
b. More than the section 6039F threshold amount from
foreign corporations or foreign partnerships (including
foreign persons related to such foreign corporations or
foreign partnerships) that you treated as gifts. The
threshold amount is available at IRS.gov/
InflationAdjustment. Select the applicable tax year news
release, then click on the Rev. Proc. link and search for
section 6039F to see the threshold amount under Notice
of Large Gifts Received from Foreign Persons.
Complete the identifying information on page 1 of the
form and Part IV. See the instructions for Part IV.

Exceptions To Filing

Form 3520 does not have to be filed to report the following
transactions.
• Transfers to funded nonqualified deferred
compensation arrangements described in section 402(b);
stock bonuses, pensions, or profit-sharing trusts that
would qualify for exemption under section 501(a) except
for the fact that it is a trust created or organized outside
the United States described in section 404(a)(4); and
amounts paid or accrued by an employer under a qualified
foreign plan described in section 404A.
• Most fair market value (FMV) transfers by a U.S. person
to a foreign trust. However, some FMV transfers must
nevertheless be reported on Form 3520 (for example,
transfers in exchange for obligations that are treated as
qualified obligations, transfers of appreciated property to a
foreign trust for which the U.S. transferor does not
immediately recognize all of the gain on the property
transferred, and transfers involving a U.S. transferor that is
related to the foreign trust). See section III of Notice 97-34,
1997-25 I.R.B. 22, available at IRS.gov/pub/irs-irbs/
irb97-25.pdf.
• Transfers to foreign trusts that have a current
determination letter from the IRS recognizing their status
as exempt from income taxation under section 501(c)(3).
• Deemed transfers from domestic trusts that become
foreign trusts to the extent the trust is treated as owned by
a foreign person, after application of section 672(f).
• Distributions from foreign trusts that are taxable as
compensation for services rendered (within the meaning
of section 672(f)(2)(B) and its regulations), so long as the
recipient reports the distribution as compensation income
on its applicable federal income tax return.
• Distributions from foreign trusts to domestic trusts that
have a current determination letter from the IRS
recognizing their status as exempt from income taxation
under section 501(c)(3).
• Transfers to, ownership of, and distributions from a
Canadian registered retirement savings plan (RRSP), a
Canadian registered retirement income fund (RRIF), or
2

any other Canadian retirement plan that is within the
meaning of section 3 of Rev. Proc. 2014-55. See Rev.
Proc. 2014-55, 2014-44 I.R.B. 753, available at
IRS.gov/IRB/2014-44_IRB#RP-2014-55.
• Certain eligible individuals’ transfers to, ownership of,
and distributions from certain tax-favored foreign
retirement trusts and certain tax-favored foreign
nonretirement savings trusts, as described in section 5 of
Rev. Proc. 2020-17. For more information about whether
you are an eligible individual and whether your foreign
trust qualifies for an exemption from foreign trust
information reporting, see Rev. Proc. 2020-17, 2020-12
I.R.B. 539, available at IRS.gov/IRB/2020-12_IRB#REVPROC-2020-17.
• Certain eligible individuals’ transactions with, and
ownership of, certain tax-favored foreign trusts that are
established and operated exclusively or almost exclusively
to provide pension or retirement benefits, or to provide
medical, disability, or educational benefits, as described in
proposed regulations under section 6048. You may rely on
these proposed regulations for any tax year ending after
May 8, 2024, and beginning on or before the date that final
regulations are published in the Federal Register,
provided you and all related persons (within the meaning
of sections 267(b) and 707(b)(1)) apply the proposed
regulations in their entirety and in a consistent manner for
all tax years beginning with the first tax year of reliance
until the applicability date of the final regulations. For more
information on whether you are an eligible individual and
whether your foreign trust qualifies for an exemption from
foreign trust information reporting, see Proposed
Regulations section 1.6048-5 as published in the Federal
Register at govinfo.gov/content/pkg/FR-2024-05-08/pdf/
2024-09434.pdf.
The exemptions from foreign trust information reporting
described in Rev. Proc. 2014-55, Rev. Proc. 2020-17, and
the proposed regulations under section 6048 do not affect
any other reporting obligations.

Joint Returns

If you and your spouse are filing a joint income tax return
for the current tax year, and you are both transferors,
grantors, or beneficiaries of the same foreign trust, then
you may file a joint Form 3520 for the same tax year. If you
and your spouse are filing a joint Form 3520, check the
box on line 1i on page 1.

Additional Reporting and Tax
Information

For more information on large gifts or bequests from
foreign persons, go to IRS.gov/Businesses/Gifts-FromForeign-Person. For more information on foreign trust
reporting requirements and tax consequences, go to
IRS.gov/ForeignTrust.
You may be required to file Financial Crimes
Enforcement Network (FinCEN) Form 114, Report of
Foreign Bank and Financial Accounts (FBAR). In addition,
you may be required to file Form 8938, Statement of
Specified Foreign Financial Assets. For more information,
go to IRS.gov/FBAR.

Instructions for Form 3520 (Rev. 12-2025)

When and Where To File

In general, a U.S person’s Form 3520 is due on the 15th
day of the 4th month following the end of such person’s
tax year for income tax purposes. For a calendar-year
individual, this is generally the same day as the filer’s
income tax return due date. If a U.S. person is granted an
extension of time to file an income tax return, Form 3520 is
due no later than the 15th day of the 10th month following
the end of the U.S. person’s tax year.
Note: This may differ from and is not tied to the due date
of the U.S. person’s income tax return.

If you are an individual who is a U.S. citizen or resident
who satisfies one of the following conditions on the due
date of your income tax return, then the due date for filing
Form 3520 is extended from the 15th day of the 4th month
(April 15) to the 15th day of the 6th month (June 15)
following the end of your tax year. You must include a
statement with Form 3520 showing that you are a U.S.
citizen or resident who meets one of these conditions.
• You live outside of the United States and Puerto Rico
and your place of business or post of duty is outside the
United States and Puerto Rico.
• You are in the military or naval service on duty outside
the United States and Puerto Rico.
If you are an individual who is a U.S. citizen or resident
and are granted an extension of time to file your income
tax return, the due date for filing Form 3520 is no later than
the 15th day of the 10th month (October 15) following the
end of your tax year.
If you are filing a Form 3520 for a U.S. decedent, the
due date is the 15th day of the 4th month (April 15)
following the end of the decedent’s last tax year for
income tax purposes. If the U.S. decedent is granted an
extension of time to file their income tax return, then the
due date for filing Form 3520 is no later than the 15th day
of the 10th month (October 15) following the end of
decedent’s last tax year.
If you are filing a Form 3520 for a U.S. decedent’s
estate, the due date is the 15th day of the 4th month
following the end of the estate’s tax year for income tax
purposes. If the U.S. decedent’s estate is granted an
extension of time to file its income tax return, then the due
date for filing Form 3520 is no later than the 15th day of
the 10th month following the end of the estate’s tax year.
If you are the U.S. owner of a foreign trust, the due date
for filing a substitute Form 3520-A is the due date of your
Form 3520. You must attach the substitute Form 3520-A,
including the Foreign Grantor Trust Owner Statement and
the Foreign Grantor Trust Beneficiary Statement, to your
Form 3520. You must also provide copies of the Foreign
Grantor Trust Owner Statement and the Foreign Grantor
Trust Beneficiary Statement to the U.S. owners and U.S.
beneficiaries by the due date of your Form 3520. See the
Instructions for Form 3520-A.
If the due date falls on a Saturday, Sunday, or legal
holiday, file by the next day that is not a Saturday, Sunday,
or legal holiday.
Send Form 3520 to the following address.
Instructions for Form 3520 (Rev. 12-2025)

Internal Revenue Service Center
P.O. Box 409101
Ogden, UT 84409
Only a complete Form 3520 is considered timely filed.
Form 3520 is considered complete only if all required
attachments are included.
Caution: If a complete Form 3520 is not filed by the due
date, including extensions, the time for assessment of any
tax imposed with respect to any event or period to which
the information required to be reported in Parts I through III
as it relates to Form 3520 will not expire before the date
that is 3 years after the date on which the required
information is reported. See section 6501(c)(8).

Who Must Sign

If Form 3520 is filed by:
• An individual or a fiduciary, it must be signed and dated
by that individual or fiduciary;
• A partnership, it must be signed and dated by a partner
or limited liability company member;
• A corporation, it must be signed and dated by the
president, vice president, treasurer, assistant treasurer,
chief accounting officer, or any other corporate officer who
is authorized to sign; or
• A receiver, trustee, or assignee filing on behalf of a
partnership or corporation, it must be signed and dated by
the fiduciary. A Form 3520 signed by a receiver or trustee
in bankruptcy on behalf of a partnership or corporation
must be accompanied by a copy of the order or
instructions of the court authorizing signing of Form 3520.
A substitute Form 3520-A attached to the U.S. owner’s
Form 3520 must be signed and dated by the U.S. owner.
The U.S. owner’s name and taxpayer identification
number (TIN) must be provided on the “Title” line of the
signature box. See the Instructions for Form 3520-A.
Note: E-signatures are accepted.
When using a paid preparer, the paid preparer must do
the following.
• Complete the required preparer information at the
bottom of page 6, including their name, Preparer Tax
Identification Number (PTIN), and other identifying details.
• Sign the return in the space provided for the preparer’s
signature.
• Provide a copy of the return to the filer.

Inconsistent Treatment of Items

The U.S. beneficiary’s and U.S. owner’s tax returns must
be consistent with the Form 3520-A filed by the foreign
trust unless you report the inconsistency to the IRS. If you
are treating items on your tax return differently from the
way the foreign trust treated them on its return, file Form
8082, Notice of Inconsistent Treatment or Administrative
Adjustment Request (AAR). See Form 8082 for more
details.

Penalties
Section 6677. A penalty applies if Form 3520 is not
timely filed or if the information is incomplete or incorrect.
For exceptions, see Reasonable cause, later. Generally,
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the initial penalty is equal to the greater of $10,000 or the
following (as applicable).
• 35% of the gross value of any property transferred to a
foreign trust for failure by a U.S. transferor to report the
creation of or transfer to a foreign trust in Part I.
• 35% of the gross value of the distributions received
from a foreign trust for failure by a U.S. person to report
receipt of the distribution in Part III.
• 5% of the gross value of the portion of the foreign trust’s
assets treated as owned by a U.S. person under the
grantor trust rules (sections 671 through 679), if the
foreign trust (a) fails to file a timely Form 3520-A and
furnish the required annual statements to its U.S. owners
and U.S. beneficiaries; or (b) does not furnish all of the
information required by section 6048(b) or includes
incorrect information. See section 6677(a) through (c) and
the instructions for Part II of this form and Form 3520-A.
If a foreign trust fails to file Form 3520-A, the U.S.
owner must complete and attach a substitute Form
3520-A to the U.S. owner’s Form 3520 by the due date of
the U.S. owner’s Form 3520 (and not the due date for the
Form 3520-A, which is otherwise due by the 15th day of
the 3rd month after the end of the trust’s tax year) in order
to avoid being subject to the penalty for the foreign trust’s
failure to timely file Form 3520-A. For example, a
substitute Form 3520-A that, to the best of the U.S.
owner’s ability, is completed and attached to the U.S.
owner’s Form 3520 by the due date for the Form 3520
(such as April 15 for U.S. owners who are individuals), is
considered to be timely filed.
Additional penalties will be imposed if the
noncompliance continues for more than 90 days after the
IRS mails a notice of failure to comply with the required
reporting. If the IRS can determine the gross reportable
amount (defined later), then the penalties will be reduced
as necessary to assure that the aggregate amount of such
penalties does not exceed the gross reportable amount.
For more information, see section 6677.
Reasonable cause. No penalties will be imposed if the
taxpayer can demonstrate that the failure to comply was
due to reasonable cause and not willful neglect.
Note: The fact that a foreign country would impose
penalties for disclosing the required information is not
reasonable cause. See section 6677(d). Similarly,
reluctance on the part of a foreign fiduciary or provisions
in the trust instrument that prevent the disclosure of
required information is not reasonable cause.
Section 6039F. In the case of a failure to timely report
foreign gifts described in section 6039F, the IRS may
determine the income tax consequences of the receipt of
such gift, and a penalty equal to 5% of the amount of such
foreign gifts applies for each month for which the failure to
report continues (not to exceed a total of 25%). See
section 6039F for additional information.
Reasonable cause. No penalty will be imposed if the
taxpayer can demonstrate that the failure to comply was
due to reasonable cause and not willful neglect.
Section 6662(j). If a U.S. owner of a foreign trust is
subject to a 20% penalty imposed under section 6662 for
an underpayment of tax required to be shown on a return,
then such penalty may be increased to 40% under section
4

6662(j) for any portion of an underpayment that is
attributable to any transaction involving any asset with
respect to which information was required to be provided
on Form 3520-A. For more information about undisclosed
foreign financial asset understatements, see section
6662(j).
Reasonable cause. No penalty will be imposed with
respect to any portion of an underpayment if the taxpayer
can demonstrate that the failure to comply was due to
reasonable cause with respect to such portion of the
underpayment and the taxpayer acted in good faith with
respect to such portion of the underpayment. See section
6664(c) for additional information.

Definitions
Distribution

A distribution received directly or indirectly from a foreign
trust for section 6048(c) reporting purposes is any
gratuitous transfer of money or other property from a
foreign trust, whether or not a portion of such trust is
treated as a grantor trust under the grantor trust rules of
sections 671 through 679, and without regard to whether
the recipient is designated as a beneficiary by the terms of
the trust. A distribution includes the receipt of a trust
corpus and the receipt of a gift or bequest described in
section 663(a).
A distribution also includes constructive transfers from
a foreign trust. For example, if charges you make on a
credit card are paid by a foreign trust or guaranteed or
secured by the assets of a foreign trust, the amount
charged will be treated as a distribution to you by the
foreign trust. Similarly, if you write checks on a foreign
trust’s bank account, the amount will be treated as a
distribution. Also, if you receive a payment from a foreign
trust in exchange for property transferred to the trust or
services rendered to the trust, and the FMV of the
payment you received exceeds the FMV of the property
transferred or services rendered, the excess will be
treated as a distribution to you. See section V of Notice
97-34.
Examples.
1. If you sell stock with an FMV of $100 to a foreign
trust and receive $150 in exchange, you have received a
distribution of $50.
2. If you receive $100 from a foreign trust for
performing services for the trust, and the services have an
FMV of $20, you have received a distribution of $80.
If you are a grantor or beneficiary of a foreign trust and
you (or a U.S. person related to you) directly or indirectly
received a loan of cash or marketable securities from a
foreign trust, or you (or a U.S. person related to you) used
any property owned by a foreign trust without paying FMV
within a reasonable amount of time, the amount of such
loan or the FMV of the use of trust property will be treated
as a distribution for reporting purposes. For this purpose,
a loan by an unrelated third party that is guaranteed by a
foreign trust is generally treated as a loan from the trust.
See section V.A of Notice 97-34.

Foreign Trust and Domestic Trust

A foreign trust is any trust other than a domestic trust.
Instructions for Form 3520 (Rev. 12-2025)

A domestic trust is any trust if:
1. A court within the United States is able to exercise
primary supervision over the administration of the trust,
and
2. One or more U.S. persons have the authority to
control all substantial decisions of the trust.

indirect transfer that is structured with a principal purpose
of avoiding the application of section 679 or 6048.

Grantor

For purposes of this determination, if a U.S. person
contributes property to a trust in exchange for any type of
interest in the trust, such interest in the trust will be
disregarded in determining whether FMV has been
received. In addition, a U.S. person will not be treated as
making a transfer for FMV merely because the transferor
is deemed to recognize gain on the transaction.

A grantor includes any person who creates a trust or
directly or indirectly makes a gratuitous transfer of cash or
other property to a trust. A grantor includes any person
treated as the owner of any part of a foreign trust’s assets
under sections 671 through 679, excluding section 678.

Note: If a partnership or corporation makes a gratuitous
transfer to a trust, the partners or shareholders are
generally treated as the grantors of the trust, unless the
partnership or corporation made the transfer for a
business purpose of the partnership or corporation.
If a trust makes a gratuitous transfer to another trust,
the grantor of the transferor trust is treated as the grantor
of the transferee trust, except that if a person with a
general power of appointment over the transferor trust
exercises that power in favor of another trust, such person
is treated as the grantor of the transferee trust, even if the
grantor of the transferor trust is treated as the owner of the
transferor trust.

Grantor Trust

A grantor trust is any trust to the extent that the assets of
the trust are treated as owned by a person other than the
trust. See the grantor trust rules in sections 671 through
679. A part of the trust may be treated as a grantor trust to
the extent that only a portion of the trust assets are owned
by a person other than the trust.

Note: Under the HIRE Act, effective after March 18, 2010,
if a foreign trust directly or indirectly loans cash or
marketable securities to a U.S. person who does not repay
the loan at a market rate of interest, or allows a U.S.
person to use trust property without paying FMV within a
reasonable period of time, the trust will be treated as
having a U.S. beneficiary and therefore is treated as a
grantor trust under the grantor trust rules. See section
679.
Reporting by U.S. owners receiving distributions
from foreign grantor trust. If a U.S. owner (defined
later) of a foreign trust receives, directly or indirectly, a
distribution from the foreign trust, the U.S. owner must
only complete lines 24 and 27 in Part III.

Gratuitous Transfer

A gratuitous transfer to a foreign trust is any transfer to the
trust other than (a) a transfer for FMV; or (b) a distribution
to the trust with respect to an interest held by the trust (i) in
an entity other than a trust (for example, a corporation or a
partnership), or (ii) in an investment trust described in
Regulations section 301.7701-4(c), a liquidating trust
described in Regulations section 301.7701-4(d), or an
environmental remediation trust described in Regulations
section 301.7701-4(e). A gratuitous transfer includes any

Instructions for Form 3520 (Rev. 12-2025)

A transfer of property to a trust may be considered a
gratuitous transfer without regard to whether the transfer is
a gift for gift tax purposes. See chapter 12 of subtitle B of
the Code (that is, sections 2501 through 2524).

If you transfer property to a related foreign trust in
exchange for an obligation of the trust (or an obligation of
a person related to the trust), it will be a gratuitous transfer
unless the obligation is a qualified obligation. Any transfer
in exchange for an obligation (whether or not a qualified
obligation) must be reported under section 6048(a). For
definitions, see Obligation and Qualified Obligation, later.
See section III.B of Notice 97-34, and the regulations
under sections 679 and 684 for additional information.

Gross Reportable Amount

Gross reportable amount is:
• The gross value of property involved in the creation of a
foreign trust or the transfer of property to a foreign trust
(including a transfer by reason of death);
• The gross value of any portion of a foreign trust treated
as owned by a U.S. person under the rules of sections 671
through 679 or any part of a foreign trust that is included in
the gross estate of a U.S. citizen or resident;
• The gross value of the assets in a trust at the time the
trust becomes a foreign trust, if the trust was a domestic
trust to which a U.S. citizen or resident had previously
transferred property, and provided that such U.S. citizen or
resident is alive at the time the trust becomes a foreign
trust (see section 679(a)(5)); or
• The gross amount of distributions received from a
foreign trust.

Gross Value or Amount

For purposes of determining the gross reportable amount,
the gross value or gross amount of property is the value of
property as determined under section 2512 and its
regulations, without regard to any prohibitions or
restrictions on a person’s interest in the property. Although
formal appraisals are not generally required, you should
keep contemporaneous records of how you arrived at your
good faith estimate.

Guarantee

A guarantee:
• Includes any arrangement under which a person,
directly or indirectly, assures, on a conditional or
unconditional basis, the payment of another’s obligation;
• Encompasses any form of credit support, and includes
a commitment to make a capital contribution to the debtor
or otherwise maintain its financial viability; or
• Includes an arrangement reflected in a “comfort letter,”
regardless of whether the arrangement gives rise to a
legally enforceable obligation. If an arrangement is
5

contingent upon the occurrence of an event, in
determining whether the arrangement is a guarantee, you
must assume that the event has occurred.

Nongrantor Trust

A nongrantor trust is any trust to the extent that the assets
of the trust are not treated as owned by a person other
than the trust under the grantor trust rules in sections 671
through 679. Thus, a nongrantor trust is treated as a
taxable entity. A trust may be treated as a nongrantor trust
with respect to only a portion of the trust assets. See
Grantor Trust, earlier.

Obligation

An obligation includes any bond, note, debenture,
certificate, bill receivable, account receivable, note
receivable, open account, or other evidence of
indebtedness, and, to the extent not previously described,
any annuity contract.

Owner

An owner of a foreign trust is the person that is treated as
owning any of the assets of a foreign trust under the rules
of sections 671 through 679.

Property

Property means any property, whether tangible or
intangible, including cash.

Qualified Obligation

A qualified obligation, for purposes of this form, is any
obligation only if:
1. The obligation is reduced to writing by an express
written agreement;
2. The term of the obligation does not exceed 5 years
(including options to renew and rollovers);
3. All payments on the obligation are denominated in
U.S. dollars;
4. The yield to maturity of the obligation is not less
than 100% of the applicable federal rate under section
1274(d) for the day on which the obligation is issued and
not greater than 130% of the applicable federal rate;
5. The U.S. person agrees to extend the period for
assessment of any income or transfer tax attributable to
the transfer and any consequential income tax changes
for each year that the obligation is outstanding to a date
not earlier than 3 years after the maturity date of the
obligation, unless the maturity date of the obligation does
not extend beyond the end of the U.S. person’s tax year
and is paid within such period (this is done on Part I,
Schedule A, line 12, and Part III, line 26, as applicable);
and
6. The U.S. person reports the status of the obligation,
including principal and interest payments, on Part I,
Schedule C, line 19, and Part III, line 28, as applicable, for
each year that the obligation is outstanding.

Related Person

A related person generally includes any person who is
related to you for purposes of sections 267 and 707(b).
This includes, but is not limited to:
6

• A member of your family—your brothers and sisters,
half-brothers and half-sisters, spouse, ancestors (parents,
grandparents, etc.), lineal descendants (children,
grandchildren, etc.), and the spouses of any of these
persons; or
• A corporation in which you, directly or indirectly, own
more than 50% in value of the outstanding stock.
See section 643(i)(2)(B) and the regulations under
sections 267 and 707(b).
Person related to a foreign trust. A person is related to
a foreign trust if such person, without regard to the transfer
at issue, is a grantor of the trust, a beneficiary of the trust,
or is related to any grantor or beneficiary of the trust. See
the definition of Related Person above.

Reportable Event

A reportable event includes the following.
1. The creation of a foreign trust by a U.S. person.
2. The transfer of any money or property, directly or
indirectly, to a foreign trust by a U.S. person, including a
transfer by reason of death. This includes transfers that
are deemed to have occurred under sections 679(a)(4)
and (5).
3. The death of a U.S. citizen or resident if:
• The decedent was treated as the owner of any portion
of a foreign trust under the rules of sections 671 through
679, or
• Any portion of a foreign trust was included in the gross
estate of the decedent.

Responsible Party

Responsible party means:
• The grantor in the case of the creation of an inter vivos
trust;
• The transferor, in the case of a reportable event
(defined above) other than a transfer by reason of death;
or
• The executor of the decedent’s estate in any other case
(whether or not the executor is a U.S. person).

U.S. Agent

A U.S. agent is a U.S. person (defined later) that has a
binding contract with a foreign trust that allows the U.S.
person to act as the trust’s authorized U.S. agent in
applying sections 7602, 7603, and 7604 with respect to:
• Any request by the IRS to examine records or produce
testimony related to the proper U.S. tax treatment of
amounts distributed, or required to be taken into account
under the grantor trust rules, with respect to a foreign
trust; or
• Any summons by the IRS for such records or testimony.
A U.S. grantor, a U.S. beneficiary, or a domestic
corporation controlled by the grantor or beneficiary may
act as a U.S. agent. However, a foreign trust will not be
treated as having a U.S. agent unless the U.S. agent’s
name, address, and TIN are entered on lines 3a through
3g on page 1 of Form 3520. See Taxpayer identification
numbers (TINs), later.
If a foreign trust with a U.S. owner does not have a U.S.
agent, the IRS may redetermine the amounts required to
be taken into account with respect to the foreign trust by
Instructions for Form 3520 (Rev. 12-2025)

the U.S. owner. See section 6048(b)(2). In order to avoid
this, a U.S. owner of a foreign trust should ensure that the
foreign trust appoints a U.S. person to act as the foreign
trust’s limited agent for purposes of applying sections
7602, 7603, and 7604. The agency relationship must be
established by the time Form 3520 is filed for the relevant
tax year and must continue as long as the statute of
limitations remains open for the relevant tax year.
In order to authorize a U.S. person to act as a U.S.
agent under section 6048(b)(2) or for purposes of section
6048(c)(2)(A), the foreign trust and the U.S. person must
enter into a binding agreement substantially in the format
of the AUTHORIZATION OF AGENT form in the
Instructions for Form 3520-A, amended as required.
If the U.S. person’s responsibility as an agent of the
foreign trust is terminated for any reason (for example,
resignation, liquidation, or death), the U.S. owner of the
foreign trust must make sure the foreign trust files an
amended Form 3520-A with the IRS within 90 days. See
section IV.B of Notice 97-34.

U.S. Beneficiary

A U.S. beneficiary generally includes any U.S. person that
could possibly benefit, directly or indirectly, from the trust
(including an amended trust) at any time, whether or not
the person is designated in the trust instrument as a
beneficiary and whether or not the person can receive a
distribution from the trust in the current year. In addition, a
U.S. beneficiary includes:
• A foreign corporation that is a controlled foreign
corporation (as defined in section 957(a)),
• A foreign partnership if a U.S. person is a partner of the
partnership, and
• A foreign estate or trust if the estate or trust has a U.S.
beneficiary. See section II of Notice 97-34 and the
regulations under section 679 for additional information.
Foreign trust treated as having a U.S. beneficiary. In
general, if a U.S. person, directly or indirectly, transfers
property to a foreign trust (other than a deferred
compensation or charitable trust described in section
6048(a)(3)(B)(ii)), the foreign trust will be treated as
having a U.S. beneficiary unless the terms of the trust
instrument specifically prohibit any distribution of income
or corpus to a U.S. person at any time, even after the
death of the U.S. transferor or any event terminating the
trust, and the trust cannot be amended or revised to allow
such a distribution. For these purposes, an amount will be
treated as accumulated for the benefit of a U.S. person
even if the U.S. person’s interest in the trust is contingent
on a future event and regardless of whether anything is
actually distributed to a U.S. person during that tax year.
Special rule in case of discretion to identify
beneficiaries. For purposes of the general rule
described earlier, if any person has the discretion of
making a distribution from the trust to, or for the benefit of,
any person, the trust will be treated as having a
beneficiary who is a U.S. person unless the terms of the
trust specifically identify the class of persons to whom
such distributions may be made, and none of those
persons are U.S. persons during the tax year.
Certain agreements and understandings treated as
terms of the trust. For purposes of the general rule
Instructions for Form 3520 (Rev. 12-2025)

described earlier, if any U.S. person who directly or
indirectly transfers property to the trust is directly or
indirectly involved in any agreement or understanding
(whether written, oral, or otherwise) that may result in the
income or corpus of the trust being paid or accumulated
to, or for the benefit of, a U.S. person, such agreement or
understanding will be treated as a term of the trust.
Certain loans or uncompensated use of trust
property. If a foreign trust is not already treated as having
a U.S. beneficiary under the rules described earlier, the
trust will be treated as having a U.S. beneficiary if, after
March 18, 2010, either:
• The foreign trust loans cash or marketable securities,
directly or indirectly, to a U.S. person, and the U.S. person
does not repay the loan at a market rate of interest within a
reasonable period of time; or
• A U.S. person, directly or indirectly, uses property that is
owned by the foreign trust and does not pay FMV of the
use of such property within a reasonable period of time.
Presumption that foreign trust has U.S. beneficiary. If
a U.S. person, directly or indirectly, transfers property to a
foreign trust (other than a deferred compensation or
charitable trust described in section 6048(a)(3)(B)(ii)), the
IRS may treat such trust as having a U.S. beneficiary for
purposes of applying section 679(d) to such transfer if the
IRS requests information with respect to the transfer and
the U.S. person fails to demonstrate to the satisfaction of
the IRS that no portion of the income or corpus of the trust
may ever be paid to or accumulated for the benefit of a
U.S. person.

U.S. Person

A U.S. person is:
• A citizen or resident of the United States, including dual
residents who claim the benefits under an income tax
treaty;
• A domestic partnership;
• A domestic corporation;
• Any estate (other than a foreign estate, within the
meaning of section 7701(a)(31)(A)); and
• Any domestic trust (defined earlier).
For guidance on determining resident alien status, go
to Pub. 519, U.S. Tax Guide for Aliens.

U.S. Transferor

A U.S. transferor is any U.S. person who:
1. Creates or settles a foreign trust;
2. Directly or indirectly transfers money or property to
a foreign trust (this includes deemed transfers under
section 679(a)(4) or section 679(a)(5));
3. Makes a sale to a foreign trust if the sale was at
other than arm’s-length terms or was to a related foreign
trust, or makes (or guarantees) a loan to a related foreign
trust; or
4. Is the executor of the estate of a U.S. person and:
a. The decedent made a testamentary transfer (a
transfer by reason of death) to a foreign trust;
b. Immediately prior to death, the decedent was
treated as the owner of any portion of a foreign trust under
the rules of sections 671 through 679; or
7

c. Any portion of a foreign trust’s assets were included
in the estate of the decedent.

mail to the street address and the U.S. person has a P.O.
box, show the box number instead.

Generally, the person defined as the transferor is the
responsible party (defined earlier) who must ensure that
required information be provided or pay appropriate
penalties.

Foreign address. Do not abbreviate the country name.

Specific Instructions
Period Covered

For calendar-year filers, fill in the “calendar year” space at
the top of the form. For fiscal-year filers, fill in the “tax year
beginning” and “ending” spaces at the top of the form.

Item A—Initial Return, Final Return,
Amended Return
Initial return. If this is the foreign trust’s first return, check
the “Initial return” box.
Final return. If the foreign trust ceases to exist, check the
“Final return” box.
Example. If you filed Form 3520 concerning
transactions with a foreign trust and that trust terminated
within the tax year, then the Form 3520 for the year in
which the trust terminated would be a final return.
Amended return. If this Form 3520 is filed to amend a
previously filed Form 3520, check the “Amended return”
box.

Item C—Excepted Specified Foreign
Financial Assets Reported

Check the box in item C only if the Form 3520 filer also
files Form 8938 for the same tax year and includes this
form in the total number of Forms 3520 reported on line 15
of Part IV, Excepted Specified Foreign Financial Assets, of
Form 8938. For more information, see the Instructions for
Form 8938, generally, and in particular, Duplicative
reporting and the specific instructions for Part IV.

Identifying Information
Taxpayer identification numbers (TINs). Use social
security numbers (SSNs) or individual taxpayer
identification numbers (ITINs) to identify individuals. Use
employer identification numbers (EINs) to identify estates,
trusts, partnerships, and corporations. Don’t use an SSN
in place of an EIN.
Applying for an EIN. If the foreign trust does not have an
EIN, the foreign trust or the U.S. owner may apply for one
online at IRS.gov/EIN. If the foreign trust’s principal place
of business is outside the United States or its territories,
the foreign trust can apply for an EIN by phone at
267-941-1099. See International EIN applicants under
Other ways to apply for an EIN at IRS.gov/EIN.
Caution: Do not enter a PTIN in any entry space on Form
3520 other than the entry space for “PTIN” at the bottom
of page 6 of the form.
Address. Include the room, suite, or other unit number
after the street address. If the post office does not deliver
8

Lines 1a and 1i. Line 1a identifies the person that is
filing Form 3520. If you and your spouse are filing a joint
Form 3520, put your names and TINs in the same order as
they appear on your Form 1040, U.S. Individual Income
Tax Return, or Form 1040-SR, U.S. Tax Return for Seniors,
and check the box on line 1i.
Line 1j. If an automatic 2-month extension applies for
your tax return, check the box and attach a statement to
the Form 3520 showing that you are a U.S. citizen or
resident who meets one of the following conditions.
• You live outside of the United States and Puerto Rico
and your place of business or post of duty is outside the
United States and Puerto Rico.
• You are in the military or naval service on duty outside
the United States and Puerto Rico.
Line 1k. If you filed for an extension of time to file your
income tax return, check the box and enter the number of
the tax return that you will be filing with the IRS.
Example. You file Form 4868, Application for
Automatic Extension of Time To File U.S. Individual
Income Tax Return, to extend the time to file your
individual income tax return (Form 1040). Enter “1040” on
the entry line.
Line 2b. Enter the EIN of the foreign trust. Do not enter
an SSN or ITIN. Only an EIN should be used to identify
the foreign trust.
Line 3. Check “No” if the foreign trust did not appoint a
U.S. agent who can provide the IRS with all relevant trust
information, and if you are required to complete Part I,
complete lines 15 through 18.
Lines 4a through 4f. If you are filing Form 3520 for a
U.S. decedent, you must provide information about the
U.S. decedent on lines 4a through 4e. You must also
check the applicable box on line 4f.

Part I—Transfers by U.S. Persons to a
Foreign Trust During the Current Tax
Year

Complete Part I if you are responsible for reporting a
reportable event that occurred during the current tax year,
you transferred property to a related trust in exchange for
a loan, or you hold a valid loan. See Who Must File,
earlier.
For information on what is a reportable event, see
Reportable Event, earlier.
Note: Although the basic reporting requirements for Part I
of Form 3520 are contained in section 6048 (and are
clarified by Notice 97-34), the reporting requirements have
been further clarified by the regulations under sections
679 and 684. Accordingly, the regulations under sections
679 and 684 should be referred to for additional
clarification for transfers that are required to be reported in
Part I of Form 3520.

Instructions for Form 3520 (Rev. 12-2025)

Line 5a. Enter the name of the trust creator. If you are the
trust creator, enter “Same as line 1a” on line 5a. If you are
not the trust creator, enter the name of the person who
created or originally settled the foreign trust.
Lines 5b and 5c. Enter the address and TIN, if any, of
the trust creator. See Identifying Information, earlier, for
specific information regarding the entering of addresses
and TINs.
If you are the trust creator, enter “Same as lines 1c, 1e,
1f, 1g, and 1h” on line 5b, and enter “Same as line 1b” on
line 5c.
Lines 6a and 6b. Enter the applicable two-letter country
code from the list at IRS.gov/CountryCodes.
Lines 7 and 8. If you are reporting multiple transfers to a
single foreign trust and the answers to line 7 or 8 are
different for various transfers, complete a separate line for
each transfer on duplicate copies of the relevant pages of
the form.
Lines 7a and 7b. Check “Yes” if you are treated as a U.S.
owner of any portion of the foreign trust under the grantor
trust rules (sections 671 through 679). You must also
complete line 7b and Part II of this form. Additionally, if
another person is treated as an owner of the transferred
assets, you must comply with the reporting requirements
that would apply to a direct transfer to that other person.
For example, if that other person is a foreign partnership,
you must comply with the reporting requirements for
transfers to foreign partnerships. See Form 8865, Return
of U.S. Persons With Respect to Certain Foreign
Partnerships.
Line 8. If the transfer was a completed gift (see
Regulations section 25.2511-2), you may have to file Form
709, United States Gift (and Generation-Skipping
Transfer) Tax Return. If the transfer was a bequest, you
may have to file Form 706, United States Estate (and
Generation-Skipping Transfer) Tax Return.
Line 9. See U.S. Beneficiary, earlier.

Schedule A—Obligations of a Related Trust

Complete the applicable portions of Schedule A with
respect to all transfers to a related foreign trust in
exchange for an obligation of the trust or a person related
to the trust that took place during the current tax year.
Line 11. For additional information, see Obligation,
Qualified Obligation, and Person related to a foreign trust,
earlier.
Line 12. If you answered “Yes” to the question on line 11b
with respect to any obligation, you must generally answer
“Yes” to the question on line 12. By so doing, you agree to
extend the period of assessment of any income or transfer
tax attributable to the transfer and any consequential
income tax changes for each year that the obligation is
outstanding to a date 3 years after the maturity date of the
obligation. When executed and filed, this form will be
deemed to be agreed upon and executed by the IRS for
purposes of Regulations section 301.6501(c)-1(d).
You have the right to refuse to extend the period of
assessment. Pub. 1035, Extending the Tax Assessment
Instructions for Form 3520 (Rev. 12-2025)

Period, provides a detailed explanation of your rights and
the consequences of the choices you may make.
Note: If you answer “No” to the question on line 12, you
generally may not treat an obligation as a qualified
obligation on line 11b. The one exception to this is if the
maturity date of the obligation does not extend beyond the
end of your tax year for which you are reporting and such
obligation is paid within that tax year.

Schedule B—Gratuitous Transfers

Complete the applicable portions of Schedule B with
respect to all reportable events (defined earlier) that took
place during the current tax year.
Line 13.
• In your column (b) description, indicate whether the
property is tangible or intangible.
• You may aggregate transfers of cash during the year on
a single line of line 13.
• If there is not enough space on the form, attach a
statement.
• For transfers reported on statements attached to the
form, you must enter “Statement” on one of the lines in
column (b) and enter the total amount of transfers
reported on the statement in columns (c), (d), (e), (f), (h),
and (i) of line 13.
Note: Penalties may be imposed for failure to report all
required information. See Penalties, earlier.
Line 13, column (d). Enter the U.S. adjusted basis of the
property transferred.
Line 13, column (e). Only include gain that is
immediately recognized at the time of the transfer.
Note: Any transfer of appreciated assets by a U.S. person
to a foreign nongrantor trust is treated as a sale or
exchange, and the transferor must recognize as gain the
excess of the FMV of the transferred property over its
adjusted basis. This rule applies to a domestic trust that
becomes a foreign trust, provided that the foreign trust is
not a grantor trust. The domestic trust is treated as having
transferred all of its assets to the foreign trust immediately
prior to becoming a foreign trust. Although the gain is not
recognized on Form 3520, it must be reported on the
appropriate form or schedule of the transferor’s income
tax return. See section 684. The transfer of assets,
however, is reported on Part I of this Form 3520.
Line 13, column (f). Generally, if the reported
transaction is a sale, you should report the gain on the
appropriate form or schedule of your income tax return.
Lines 15 through 18. If you checked “No” on line 3 and
you are required to complete Part I, acknowledging that
the foreign trust did not appoint a U.S. agent who can
provide the IRS with all relevant trust information,
complete lines 15 through 18.
Line 15. Enter the name, address, whether the person is
a U.S. beneficiary (defined earlier), and TIN, if any, of all
reportable beneficiaries. Include specified beneficiaries,
classes of discretionary beneficiaries, and names or
classes of any beneficiaries that could be named as

9

additional beneficiaries. If there is not enough space on
the form, attach a statement.

receive a distribution from the foreign trust. See the
instructions for Part III.

Line 17. Enter the name, address, and TIN, if any, of any
person, other than those listed on line 16, that has
significant powers over the trust (for example, “protectors,”
“enforcers,” any person that must approve trustee
decisions or otherwise direct trustees, any person with a
power of appointment, or any person with powers to
remove or appoint trustees, etc.). Include a description of
each person’s powers. If there is not enough space, attach
a statement.

Line 20. Enter information regarding any person,
including yourself, who is considered the owner of any
portion of the trust under the rules of sections 671 through
679. Also, enter in column (e) the specific Code section
that causes you or any other person (as applicable) to be
considered an owner for U.S. income tax purposes. See
the grantor trust rules under sections 671 through 679.

Line 18. If you checked “No” on line 3, attach a copy of
the following documents.
• A summary of the terms of the foreign trust that includes
a summary of any oral agreements or understandings you
have with the trustee, whether or not legally enforceable.
• A copy of all trust documents (and any revisions),
including the trust instrument, any memoranda of wishes
prepared by the trustee summarizing your wishes, any
letter of wishes you’ve prepared summarizing your wishes,
and any similar documents.
• A copy of the trust’s financial statements, including a
balance sheet and an income statement similar to those
shown on Form 3520-A. These financial statements must
reasonably reflect the trust’s accumulated income under
U.S. income tax principles. For example, the statements
must not treat capital gains as additions to trust corpus.
• A copy of the trust’s organizational chart, including
ownership structure and percentage of ownership.

Line 22. Check “Yes” if the foreign trust filed Form 3520-A
for the current tax year and attach a copy of pages 3 and 4
(Foreign Grantor Trust Owner Statement) of the Form
3520-A. See section IV of Notice 97-34.
Check “No” if the foreign trust has not filed Form
3520-A for the current tax year and attach a substitute
Form 3520-A that you have completed to the best of your
ability.

Note: If these documents have been previously attached
to a Form 3520-A or Form 3520 filed within the previous 3
years, attach only relevant updates.

Schedule C—Qualified Obligations Outstanding
in the Current Tax Year
Line 19. Provide information on the status of outstanding
obligations of the related foreign trust (or an obligation of a
person related to the foreign trust) that you reported as a
qualified obligation in the current tax year. This information
is required in order to retain the obligation’s status as a
qualified obligation. If relevant, attach a statement
describing any changes in the terms of the qualified
obligation.
If the obligation fails to retain the status of a qualified
obligation, you will be treated as having made a gratuitous
transfer to the foreign trust, which must be reported on
Schedule B of this Part I in the year the obligation fails to
meet the criteria for a qualified obligation. See
section III.C.2 of Notice 97-34.

Part II—U.S. Owner of a Foreign Trust

Complete Part II if you are considered the owner of any
assets of a foreign trust under the rules of sections 671
through 679 during the tax year. You are required to enter
an EIN for such foreign trust on line 2b on page 1 of the
form.
Note: You are required to complete Part II even if there
have been no transactions involving the trust during the
tax year. You may also need to complete Part III if you
10

Lines 21a and 21b. Enter the applicable two-letter code
from the list at IRS.gov/CountryCodes.

Caution: You may be liable for a penalty equal to the
greater of $10,000 or 5% of the gross value of the portion
of trust assets that you are treated as owning. There are
additional penalties for continuing failure to file after notice
by the IRS. See section 6677(a) through (c). Also, see
Penalties, earlier.
Line 23. Enter the FMV of the trust assets that you are
treated as owning. Include all assets at FMV as of the end
of the tax year. For this purpose, disregard all liabilities.
The trust should send you this information in connection
with its Form 3520-A. If you did not receive such
information (line 9 of the Foreign Grantor Trust Owner
Statement) from the trust, complete line 23 to the best of
your ability. At a minimum, include the value of all assets
that you have transferred to the trust.
Use Form 8082 to notify the IRS that you did not
receive a Foreign Grantor Trust Owner Statement.
However, filing Form 8082 does not relieve you of any
penalties that may be imposed under section 6677. See
Penalties, earlier.

Part III—Distributions to a U.S. Person
From a Foreign Trust During the
Current Tax Year

Complete Part III if you are a U.S. person who received a
distribution from a foreign trust during the current tax year.
If you received an amount from a portion of a foreign
trust of which you are treated as the owner, complete lines
24 and 27. If you received an amount from a foreign trust
that would require a report under both Parts III and IV (gifts
or bequests) of Form 3520, report the amount only in Part
III.
Line 24. Report any cash or the FMV of other property
that you received (actually or constructively, directly or
indirectly) from a foreign trust during the current tax year,
whether or not taxable, unless the amount is a loan to you
from the trust or constitutes uncompensated use of trust
property, both of which must be reported on line 25. For
example, if you are a partner in a partnership that receives
a distribution from a foreign trust, you must report your
Instructions for Form 3520 (Rev. 12-2025)

allocable share of such payment as an indirect distribution
from the trust.
Line 24, column (c). The filer is permitted to enter the
basis of the property in the hands of the beneficiary (as
determined under section 643(e)(1)), if lower than the
FMV of the property, but only if the taxpayer is not required
to complete Schedule A (lines 31 through 38) due to lack
of documentation. For these purposes, lack of
documentation refers to a situation in which the filer
checked “No” on line 29 or 30 because (a) the beneficiary
did not receive a Foreign Grantor Trust Beneficiary
Statement or a Foreign Nongrantor Trust Beneficiary
Statement from the trust, or (b) such statement did not
contain all of the items specified under the instructions for
line 29 or 30, later.
If you received a distribution from a foreign trust
attributable to a gift or bequest from a covered expatriate,
you may have to file Form 708, United States Return of
Tax for Gifts and Bequests Received From Covered
Expatriates. See sections 877A and 2801, and What’s
new—Estate and gift tax, available at IRS.gov/
Businesses/Small-Businesses-Self-Employed/WhatsNew-Estate-and-Gift-Tax.
Line 25. If you or a U.S. person related to you received a
loan of cash or marketable securities, directly or indirectly,
from a related foreign trust, or the uncompensated use of
trust property (defined later), the amount of such loan or
the FMV of the use of trust property will be treated as a
reportable distribution, whether or not taxable. For this
purpose, a loan to you by an unrelated third party that is
guaranteed by a foreign trust is generally treated as a loan
from the trust.
Line 25, column (e). Answer “Yes” if an obligation
given in exchange for the loan is a qualified obligation
(defined earlier).
Line 25, column (f). The FMV of an obligation is zero
unless it is a qualified obligation. Therefore, in the case of
obligations that are not qualified obligations, enter “-0-” in
column (f).
Uncompensated use of trust property. If you or a
U.S. person related to you, directly or indirectly, used any
property of a foreign trust, the FMV of such use will be
treated as a reportable distribution whether or not taxable.
Report the FMV of the use of trust property in column (a)
and the date of first use in column (b), skip columns (c)
through (e), report the amount paid for such use in column
(f), and enter the amount treated as a taxable distribution
from the trust in column (g) by subtracting column (f) from
column (a). See section 643(i) for more information.
Note: Under the HIRE Act, effective after March 18, 2010,
if a foreign trust with a U.S. transferor is not already
treated as a grantor trust under the rules of sections 671
through 679, the foreign trust will be treated as having
acquired a U.S. beneficiary and will therefore be treated
as a grantor trust, if it makes a loan of cash or marketable
securities, directly or indirectly, to a U.S. person or allows
a U.S. person, directly or indirectly, to use trust property,
and the U.S. person does not repay the loan at a market
rate of interest or pay the trust the FMV of the use of the
property within a reasonable period of time. Accordingly,
the loan or use of trust property will not be treated as a
Instructions for Form 3520 (Rev. 12-2025)

taxable distribution under section 643(i) but will remain
reportable on Part III of this Form 3520.
Line 26. If you checked “Yes” in column (e) of line 25, you
must generally check “Yes” on line 26. By doing so, you
agree to extend the period of assessment of any income
or transfer tax attributable to the transfer and any
consequential income tax changes for each year that the
obligation is outstanding to a date 3 years after the
maturity date of the obligation. When executed and filed,
this form will be deemed to be agreed upon and executed
by the IRS for purposes of Regulations section
301.6501(c)-1(d).
You have a right to refuse to extend the period of
assessment. See Pub. 1035 for a detailed explanation of
your rights.
Line 27. Penalties may be imposed for failure to
accurately report all distributions received during the
current tax year. See Penalties, earlier.
Line 28. Provide information on the status of any
outstanding obligation to the foreign trust that you
reported as a qualified obligation in the current tax year.
This information is required in order to retain the
obligation’s status as a qualified obligation. If relevant,
attach a statement describing any changes to the terms of
the qualified obligation. If the obligation fails to retain the
status of a qualified obligation, you will be treated as
having received a taxable distribution under section 643(i)
from the foreign trust. See section V.A of Notice 97-34.
Line 29. Check “Yes” if you received a Foreign Grantor
Trust Beneficiary Statement (page 5 of Form 3520-A) from
the foreign trust with respect to a distribution. Attach the
Foreign Grantor Trust Beneficiary Statement from the
foreign trust and do not complete the rest of Part III with
respect to the distribution.
If a U.S. beneficiary receives a complete Foreign
Grantor Trust Beneficiary Statement with respect to a
distribution during the tax year, the beneficiary should
treat the distribution for income tax purposes as if it came
directly from the owner. For example, if the distribution is a
gift, the beneficiary should not include the distribution in
gross income.
In addition to basic identifying information (see
Identifying Information, earlier) about the foreign trust and
its trustee, this statement must contain these items.
1. The first and last day of the tax year of the foreign
trust to which this statement applies.
2. An explanation of the facts necessary to establish
that the foreign trust should be treated for U.S. tax
purposes as owned by another person. The explanation
should identify the Code section that treats the trust as
owned by another person.
3. A statement identifying whether the owner of the
trust is an individual, trust, corporation, or partnership.
4. A description of property (including cash)
distributed or deemed distributed to the U.S. person
during the tax year and the FMV of the property
distributed.
5. A statement that the trust will permit either the IRS
or the U.S. beneficiary to inspect and copy the trust’s
11

permanent books of account, records, and such other
documents that are necessary to establish that the trust
should be treated for U.S. tax purposes as owned by
another person. This statement is not necessary if the
trust has appointed a U.S. agent.
6. A statement as to whether the foreign trust has
appointed a U.S. agent (defined earlier). If the trust has a
U.S. agent, include the name, address, and TIN of the
agent.
If any of the items required for the Foreign Grantor Trust
Beneficiary Statement is missing, you must check “No.”
Also, if you answer “Yes” and the foreign trust or U.S.
agent does not produce records or testimony when
requested or summoned by the IRS, the IRS may
redetermine the tax consequences of your transactions
with the trust and impose appropriate penalties under
section 6677. See section 6048(c)(2)(A).
Caution: If a foreign nongrantor trust or the question is
not applicable, check “N/A.”
Line 30. Check “Yes” if you received a Foreign
Nongrantor Trust Beneficiary Statement from the foreign
trust with respect to a distribution. Attach the Foreign
Nongrantor Trust Beneficiary Statement from the foreign
trust. A Foreign Nongrantor Trust Beneficiary Statement
must include the following items.
1. An explanation of the appropriate U.S. tax treatment
of any distribution or deemed distribution for U.S. tax
purposes or sufficient information to enable the U.S.
beneficiary to establish the appropriate treatment of any
distribution or deemed distribution for U.S. tax purposes.
2. A statement identifying whether any grantor of the
trust is a partnership or a foreign corporation. If so, attach
an explanation of the relevant facts.
3. A statement that the trust will permit either the IRS
or the U.S. beneficiary to inspect and copy the trust’s
permanent books of account, records, and such other
documents that are necessary to establish the appropriate
treatment of any distribution or deemed distribution for
U.S. tax purposes. This statement is not necessary if the
trust has appointed a U.S. agent.
4. The Foreign Nongrantor Trust Beneficiary
Statement must also include items (1), (4), and (6), as
listed in the line 29 instructions, earlier, in addition to the
basic identifying information (see Identifying Information,
earlier) about the foreign trust and its trustee.
If any of items required for the Foreign Nongrantor Trust
Beneficiary Statement is missing, you must check “No.”
Also, if you answer “Yes” and the foreign trust or U.S.
agent does not produce records or testimony when
requested or summoned by the IRS, the IRS may
redetermine the tax consequences of your transactions
with the trust and impose appropriate penalties under
section 6677. See section 6048(c)(2)(A).
Caution: If a foreign grantor trust, or the question is not
applicable, check “N/A.”

Schedule A—Default Calculation of Trust
Distributions

If you answered “Yes” to line 30, you may complete either
Schedule A or Schedule B. Generally, if you complete
Schedule A in the current year, or did so in prior years, you
must continue to complete Schedule A for all future years,
even if you are able to answer “Yes” to line 30 in that future
year. The only exception to this consistency rule is that
you may use Schedule B in the year that a trust
terminates, but only if you are able to answer “Yes” to
line 30 in the year of termination.
Line 32. To the best of your knowledge, state the number
of years the trust has been in existence as a foreign trust
and attach an explanation of your basis for this statement.
Consider any portion of a year to be a complete year. If
this is the first year that the trust has been a foreign trust,
do not complete the rest of Part III.
Line 33. Enter the total amount of distributions that you
received during the 3 preceding tax years or the number
of years the trust has been a foreign trust if fewer than 3
years. For example, if a trust distributed $50 in year 1,
$120 in year 2, and $150 in year 3, the amount reported
on line 33 would be $320 ($50 + $120 + $150).
Line 35. Divide line 34 by 3.0 or the number of years the
trust has been a foreign trust if fewer than 3 years.
Consider any portion of a year to be a complete year. For
example, a foreign trust created on July 1, 2021, would be
treated on a 2023 calendar year return as having 2
preceding years (2021 and 2022). In this case, you would
calculate the amount on line 35 by dividing line 34 by 2.0.
Do not disregard tax years in which no distributions were
made. The IRS will consider your proof of these prior
distributions as adequate records to demonstrate that any
distribution up to the amount on line 31 is not an
accumulation distribution in the current tax year.
Line 36. Enter this amount as ordinary income on your
income tax return. Report this amount on the appropriate
schedule of your income tax return (for example,
Schedule E (Form 1040), Part III).
Line 37. If there is an amount on line 37, you must also
complete line 38 and Schedule C—Calculation of Interest
Charge to determine the amount of any interest charge
you may owe.

Schedule B—Actual Calculation of Trust
Distributions

You may only use Schedule B if:
• You answered “Yes” to line 30,
• You attach a copy of the Foreign Nongrantor Trust
Beneficiary Statement to this return, and
• You have never before used Schedule A for this foreign
trust or this foreign trust terminated during the tax year.
Line 40a. Enter on line 40a the amount received by you
from the foreign trust that is treated as ordinary income of
the trust in the current tax year. Ordinary income is all
income that is not capital gains. Report this amount on the
appropriate schedule of your tax return (for example,
Schedule E (Form 1040), Part III).
Lines 42a through 42d. Enter on these lines the
applicable amounts received by you from the foreign trust

12

Instructions for Form 3520 (Rev. 12-2025)

that are treated as capital gain income of the trust in the
current tax year. Report these amounts on the appropriate
schedule of your tax return (for example, Schedule D
(Form 1040)).
Line 45. Enter the foreign trust’s aggregate undistributed
net income (UNI).
Example. A trust was created in 2018 and has made
no distributions prior to 2024. Assume the trust’s ordinary
income was $0 in 2023, $60 in 2022, $124 in 2021, $87 in
2020, $54 in 2019, and $25 in 2018. Thus, for 2024, the
trust’s UNI would be $350. If the trust earned $100 and
distributed $200 during 2024 (so that $100 was distributed
from accumulated earnings), the trust’s 2025 aggregate
UNI would be $250 ($350 + $100 − $200).
Line 46. Enter the foreign trust’s weighted undistributed
net income (weighted UNI). The trust’s weighted UNI is its
accumulated income that has not been distributed,
weighted by the years that it has accumulated income. To
calculate weighted UNI, multiply the undistributed income
from each of the trust’s years by the number of years since
that year, and then add each year’s result. Using the
example from line 45, the trust’s weighted UNI in 2024
would be $1,260, calculated as follows.

Year

No. of
years
since that
year

2023
2022
2021
2020
2019
2018

1
2
3
4
5
6

TOTAL

UNI from
each year

Weighted UNI

$ 0
60
124
87
54
25

$ 0
120
372
348
270
150

$350

$1,260

To calculate the trust’s weighted UNI for 2025, the trust
could update this calculation, or the weighted UNI shown
on line 46 of the 2024 Form 3520 could simply be updated
using the following steps.
1. Begin with the 2024 weighted UNI.
2. Add UNI at the beginning of 2024.
3. Add trust earnings in 2024.
4. Subtract trust distributions in 2024.
5. Subtract weighted trust accumulation distributions
in 2024. The weighted trust accumulation distributions are
the trust accumulation distributions in 2024 multiplied by
the applicable number of years from 2024.
Using the example above, the trust’s 2025 weighted
UNI would be $1,150, calculated as follows.

Instructions for Form 3520 (Rev. 12-2025)

2024 weighted UNI . . . . . . . . . . . . . . . . . . . . .

$1,260

UNI at beginning of 2024 . . . . . . . . . . . . . . . . .

+ 350

Trust earnings in 2024 . . . . . . . . . . . . . . . . . . .

+ 100

Trust distributions in 2024

. . . . . . . . . . . . . . . .

− 200

Weighted trust accumulation distributions in 2024
($100 X 3.6) . . . . . . . . . . . . . . . . . . . . . . .

– 360

2025 weighted UNI . . . . . . . . . . . . . . . . . . . . .

$1,150

Line 47. Calculate the trust’s applicable number of years
by dividing line 46 by line 45. This would be the weighted
UNI divided by the annual UNI. Using the examples in the
instructions for lines 45 and 46, the trust’s applicable
number of years would be 3.6 (1,260/350) in 2024 and 4.6
(1,150/250) in 2025.
Note: Include as many decimal places as there are digits
in the UNI on line 45. For example, using the example in
the instructions for line 45, include three decimal places.

Schedule C—Calculation of Interest Charge

Complete Schedule C if you entered an amount on line 37
or line 41a.
Line 49. Include the amount from line 48 of this form on
line 1 of Form 4970, Tax on Accumulation Distribution of
Trusts. Then, compute the tax on the total accumulation
distribution using lines 1 through 28 of Form 4970. Enter
on line 49 the tax from line 28 of Form 4970.
Note: Use Form 4970 as a worksheet and attach it to
Form 3520.
Line 51. Interest accumulates on the tax (line 49) for the
period beginning on the date that is the applicable number
of years (as rounded on line 50) prior to the applicable
date and ending on the applicable date. For purposes of
making this interest calculation, the applicable date is the
date that is mid-year through the tax year for which
reporting is made. For example, in the case of a 2025
calendar-year taxpayer, the applicable date would be
June 30, 2025.
Alternatively, if you received only a single distribution
during the tax year that is treated as an accumulation
distribution, you may use the date of that distribution as
the applicable date.
For portions of the interest accumulation period that are
prior to 1996 and after 1976, interest accumulates at a
simple rate of 6% annually, without compounding. For
portions of the interest accumulation period that are after
1995, interest is compounded daily at the rate imposed on
underpayments of tax under section 6621(a)(2). This
compounded interest for periods after 1995 is imposed
not only on the tax, but also on the total simple interest
attributable to pre-1996 periods.
If you are a calendar-year taxpayer and you use June
30 of the calendar year as the applicable date for
calculating interest, use the table found on IRS.gov/
CombinedInterestRate to determine the combined interest
rate and enter it on line 51. If you are not a calendar-year
taxpayer or you choose to use the actual date of the
distribution as the applicable date, calculate the combined
13

interest rate using the above principles and enter it on
line 51.
Line 53. Report this amount as additional tax (ADT) on
the appropriate line of your income tax return. For
example, Form 1040 filers include this amount as part of
the total for the “Any other taxes” line on Schedule 2 (Form
1040) under Part II—Other Taxes.

Part IV—U.S. Recipients of Gifts or
Bequests Received During the
Current Tax Year From Foreign
Persons

Complete Part IV if you are a U.S. person who has
received gifts or bequests from a foreign person or estate.
A gift to a U.S. person does not include any amount
paid for qualified tuition or medical payments made on
behalf of the U.S. person.
If a foreign trust makes a distribution to a U.S. person,
the U.S. person must report the amount as a distribution in
Part III, rather than as a gift in Part IV.
Note: If you fail to timely report foreign gifts that should be
reported under section 6039F, the IRS may determine the
income tax consequences of the receipt of such gift, and
penalties may be imposed. See Penalties, earlier.
Contributions of property by foreign persons to
domestic or foreign trusts that have U.S. beneficiaries are
not reportable by those beneficiaries in Part IV unless they
are treated as receiving the contribution in the year of the
transfer. For example, if the U.S. beneficiary is treated as
an owner of that portion of the trust under section 678,
then the contribution must be reported by such U.S.
beneficiary in Part IV.
A domestic trust that is not treated as owned by
another person is required to report the receipt of a
contribution to the trust from a foreign person as a gift in
Part IV.
A domestic trust that is treated as owned by a foreign
person is not required to report the receipt of a
contribution to the trust from a foreign person. However, a
U.S. person should report the receipt of a distribution from
a domestic trust that is treated as owned by a foreign
person as a gift from a foreign person in Part IV, rather
than as a distribution to a U.S. person in Part III.
Line 54. Check “Yes” if during the current tax year, you
received more than $100,000 that you treated as gifts or
bequests from a nonresident alien, including a distribution
received from a domestic trust treated as owned by a
foreign person or a foreign estate. Complete columns (a)
through (c).
To calculate the threshold amount of $100,000, you
must aggregate gifts from different foreign nonresident
aliens and foreign estates if you know, or have reason to
know, that those persons are related to each other or if
one is acting as a nominee or intermediary for the other.
See Related Person, earlier.
For example, if you receive a gift of $75,000 from Abby,
a nonresident alien individual, and a gift of $40,000 from
14

Brian, a nonresident alien individual, and you know that
Abby and Brian are related, you must answer “Yes” and
complete columns (a) through (c) for each gift.
However, if you answered “Yes” but none of the
individual gifts or bequests received exceeds $5,000, do
not complete columns (a) through (c). Instead, enter in
column (b) of the first line, “No gifts or bequests exceed
$5,000.”
If you received a gift or bequest from a covered
expatriate, you may have to file Form 708. See sections
877A and 2801, and What’s New—Estate and gift tax for
additional information.
Line 55. Check “Yes” if you received aggregate amounts
in excess of the section 6039F threshold amount during
the current tax year that you treated as gifts from any of
the following.
• Foreign corporations.
• Foreign partnerships.
• Any foreign persons that you know or have reason to
know that are related to such foreign corporations or
foreign partnerships.
For example, if you, a calendar-year taxpayer during
2023, received $8,000 from Xander Corp. (a foreign
corporation) that you treated as a gift, and $15,000 that
you received from Allison (a nonresident alien) that you
treated as a gift, and you know that Xander Corp. is wholly
owned by Allison, you must complete columns (a) through
(g) for each gift.
To obtain the threshold amount, go to IRS.gov/
InflationAdjustment. Select the applicable tax year news
release, then click on the Rev. Proc. link and search for
section 6039F to see the threshold amount under Notice
of Large Gifts Received from Foreign Persons.
Note: Gifts from foreign corporations or foreign
partnerships are subject to recharacterization by the IRS
under section 672(f)(4).
Line 56. Check “Yes” if you have any reason to believe
that the foreign donor, in making any gift or bequest
described in lines 54 and 55, was acting as a nominee or
intermediary for any other person. If the ultimate donor on
whose behalf the reporting donor is acting is a foreign
corporation or foreign partnership, attach an explanation
including the ultimate foreign donor’s name, address, TIN
(if any) and whether it is a corporation or partnership.
If the ultimate donor is a foreign trust, treat the amount
received as a distribution from a foreign trust and
complete Part III.
Privacy Act and Paperwork Reduction Act Notice. We
ask for the information on this form to carry out the Internal
Revenue laws of the United States. You are required to
give us the information. We need it to ensure that you are
complying with these laws and to allow us to figure and
collect the right amount of tax.
Our authority to ask for information is sections 6001,
6011, and 6012(a) and their regulations, which require you
to file a return or statement with us for any tax for which
you are liable. Your response is mandatory under these
sections. Section 6109 requires you to provide your TIN.
You must fill in all parts of the tax form that apply to you.
Instructions for Form 3520 (Rev. 12-2025)

You are not required to provide the information
requested on a form that is subject to the Paperwork
Reduction Act unless the form displays a valid OMB
control number. Books or records relating to a form or its
instructions must be retained as long as their contents
may become material in the administration of any Internal
Revenue law. Generally, tax returns and return information
are confidential, as required by section 6103. However,
section 6103 allows or requires the IRS to disclose or give
the information shown on your tax return to others as
described in the Code. For example, we may disclose your
tax information to the Department of Justice to enforce the
tax laws, both civil and criminal, and to cities, states, the
District of Columbia, and U.S. commonwealths or
territories to carry out their tax laws. We may also disclose
this information to other countries under a tax treaty, to
federal and state agencies to enforce federal nontax
criminal laws, or to federal law enforcement and
intelligence agencies to combat terrorism. Failure to
provide this information, or providing false information,
may subject you to fines or penalties.
Keep this notice with your records. It may help you if we
ask you for other information.
The time needed to complete and file this form and
related schedules will vary depending on individual

Instructions for Form 3520 (Rev. 12-2025)

circumstances. The estimated burden for individual
taxpayers filing this form is approved under OMB control
number 1545-0074 and is included in the estimates
shown in the instructions for their individual income tax
return. The estimated burden for all other taxpayers who
file this form is shown below.
Recordkeeping . . . . . . . . . . . . . . . . . . . . . .

42 hr., 34 min.

Learning about the law or the form. . . . . . . . .

4 hr., 50 min.

Preparing the form . . . . . . . . . . . . . . . . . . .

6 hr., 40 min.

Sending the form to the IRS . . . . . . . . . . . . .

16 min.

If you have comments concerning the accuracy of
these time estimates or suggestions for making this form
simpler, we would be happy to hear from you. You can
send us comments through IRS.gov/FormComments. Or,
you can write to the Internal Revenue Service, Tax Forms
and Publications, 1111 Constitution Ave. NW, IR-6526,
Washington, DC 20224. Do not send the form to this
office. Instead, see When and Where To File, earlier.

15