What Is Form 3520 A 2020
Form 3520 A, also known as the Annual Information Return of Foreign Trust With a U.S. Owner, is a vital document for individuals involved with foreign trusts. The form allows the United States Internal Revenue Service (IRS) to assess the activities and financial standing of foreign trusts with U.S. owners. It provides a clear view of the trust's income, distributions, and beneficiaries, ensuring the proper reporting and taxation of foreign trust assets.
When to Use Form 3520 A 2020
This form needs to be used in several distinct situations:
- U.S. persons (either citizens or residents) who are considered the owners of any part of a foreign trust's assets under the rules of the Internal Revenue Code sections 671-679 must use this form.
- If you have received distributions from a foreign trust during the tax year, you must report this on Form 3520 A.
- Form 3520 A is required if you've created a foreign trust with assets or transferred assets to a foreign trust during the given tax year.
How To Fill Out Form 3520 A 2020
Part I: Identifying Information
Enter the full legal name of the foreign trust.
U.S. Employer Identification Number (EIN): Provide the EIN assigned to the foreign trust. The trust must apply for an EIN if it doesn't have one.
If the trust does not have an EIN, a unique Reference ID Number should be used to identify the trust.
List the full name of each trustee of the foreign trust.
Enter the complete postal address of the trust, including the country.
If different from the trust's address, provide the location where the trust's major activities are conducted.
List the name and address of the U.S. person(s) considered the owner(s) of the foreign trust.
Indicate the tax year you’re reporting for, ensuring it aligns with the calendar year 2020.
Part II: Annual Information
This section requires detailed information about the foreign trust's activities, income, and distributions during the tax year.
Report the trust's income types, such as interest, dividends, and royalties. Use the tax year's accounting method consistently.
Provide a snapshot of the trust's financial situation, listing assets, liabilities, and equity.
Detail any distributions made to the U.S. owner or beneficiaries, including cash and property distributions.
If applicable, prepare a separate statement for each U.S. owner, outlining their portion of the trust's income, deductions, and credits.
Part III: Foreign Trust Owner Statement and Foreign Trust Beneficiary Statement
Private and accurate reporting is essential for both the U.S. owner(s) and beneficiary(ies). These sections summarize the relevant information, which should be reflected in the corresponding statements attached to the form.
Prepare separate statements for each U.S. owner and beneficiary: These statements should mirror the information reported in Part II, but adjusted to reflect the portion that applies to each individual specifically.
For owners, detail their percentage of ownership and the tax items attributed to them. For beneficiaries, outline distributions received or entitled to.
Part IV: Additional Information
Answer all questions in this section, providing any required explanations or additional details on a separate attached sheet if space is insufficient.
Part V: U.S. Agent for Service of Process
Agent's Name and Address: Appoint a U.S. person or entity willing to act as the U.S. agent who agrees to accept service of process for IRS matters related to the trust.
Include a declaration from the agent agreeing to act in this capacity.
Signing the Form
The trustee or authorized U.S. agent must sign and date the form, certifying that, to the best of their knowledge, the form is accurate and complete.
When to File Form 3520 A 2020
The deadline for filing Form 3520 A is the 15th day of the 3rd month after the end of the trust's tax year. For most trusts, this will be March 15th following the reported tax year. If additional time is needed, an extension can be requested which grants an additional six months to file.
Filtering the complex landscape of IRS tax forms, Form 3520 A 2020 stands as a crucial component for individuals with foreign trusts. Through meticulous reporting, taxpayers can navigate the responsibilities that come with international financial interests, ensuring compliance and preventing potential penalties.
Related Content - Form 3520-A (2020)
