Instructions for Form 3520

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

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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

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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

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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

UNI from

each year

2023

2022

2021

2020

2019

2018

1

2

3

4

5

6

$ 0

60

124

87

54

25

$ 0

120

372

348

270

150

$350

$1,260

TOTAL

Weighted UNI

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