Form 3520 vs Form 3520-A: What Is the Difference?
Form 3520 reports foreign gifts and trust distributions. Form 3520-A is the annual information return of a foreign trust. Learn which form you need and when.
Form 3520
For recipients and donors
File Form 3520 if you receive foreign gifts over $100,000, receive distributions from a foreign trust, are treated as the owner of a foreign trust, or transfer assets to a foreign trust.
Event-driven
Form 3520 is filed when a reportable event occurs — a gift, a distribution, a transfer, or the creation of a trust. It is not necessarily filed every year.
Penalties start at $10,000
The penalty for failure to file Form 3520 is the greater of $10,000 or 35% of the gross reportable amount. For foreign trust distributions, the penalty is 35% of the distribution amount.
Filed with Form 1040
Attach Form 3520 to your personal tax return by the due date (April 15, June 15 for expats, or October 15 with extension).
Form 3520-A
For trust owners
File Form 3520-A if you are treated as the owner of a foreign trust under the grantor trust rules (Sections 671-679). This applies if you funded the trust and retained certain powers or benefits.
Annual requirement
Form 3520-A is filed every year the trust exists and you remain the owner. It reports the trust's income, deductions, distributions, and changes in beneficial interest.
Same $10,000 penalty
The penalty for failure to file Form 3520-A is also the greater of $10,000 or 35% of the gross reportable amount. Because it is an annual form, penalties can compound quickly.
Filed separately or with 1040
Form 3520-A can be filed by the trust itself (if it has a US agent) or by the owner attaching it to their personal return. Most expat-owned foreign trusts file via the owner's return.
Key Differences
| Aspect | Form 3520 | Form 3520-A |
|---|---|---|
| Who files | Recipients, donors, responsible parties | Trust owners (grantor trust rules) |
| Trigger | Reportable event (gift, distribution, transfer) | Annual (every year trust exists) |
| Information reported | Gift/distribution details, trust transactions | Trust income, deductions, balance sheet |
| Penalty | Greater of $10,000 or 35% of amount | Greater of $10,000 or 35% of amount |
| Due date | With Form 1040 | With Form 1040 (or March 15 if trust files separately) |
| Foreign gift reporting | Yes (over $100,000) | No |
| Example | You receive a $150,000 inheritance from a German estate | You funded an offshore trust and retained a reversionary interest |
When to Choose Form 3520
File Form 3520 if you received a foreign gift or inheritance over $100,000, received a distribution from a foreign trust, or transferred assets to a foreign trust. Most expats encounter Form 3520 when receiving large gifts from family abroad or when named as a beneficiary of a foreign trust.
When to Choose Form 3520-A
File Form 3520-A only if you are treated as the owner of a foreign trust under US grantor trust rules. This typically applies if you created or funded a foreign trust and retained certain powers (revocation, control over beneficial enjoyment, reversionary interest). Most ordinary expats who merely receive trust distributions do not file Form 3520-A — they file Form 3520 for the distribution.
Frequently Asked Questions
Do I need to file both Form 3520 and 3520-A?
Possibly. If you are the owner of a foreign trust and also receive a distribution from it, you may need both forms. Form 3520-A reports the trust's annual activity as the owner. Form 3520 reports the distribution you received as a beneficiary. However, if you are only a beneficiary (not the owner), you typically file only Form 3520.
What is a foreign trust for US tax purposes?
A trust is foreign if a US court cannot exercise primary supervision over its administration and no US person has authority to control all substantial decisions. Many offshore trusts, family trusts in common-law countries, and some pension structures are foreign trusts. The IRS applies a facts-and-circumstances test.
Do I file Form 3520 for a foreign inheritance?
Yes, if the aggregate value of foreign gifts and inheritances from all foreign persons exceeds $100,000 in a tax year. The inheritance itself is not taxable to the recipient, but it must be reported. Form 3520 is an information return, not a tax return. Keep detailed records of the donor, date, value, and relationship.