Form 3520 & Foreign Gift Reporting for Americans in Canada
How to file Form 3520 from Canada. Learn the reporting requirements for Canadian inheritances, gifts from Canadian relatives, and Canadian trust distributions.
Form
Form 3520
Country
Canada
Filing Status
Treaty in force
Overview
Canada is home to over a million American expats and dual citizens. Many receive inheritances from Canadian estates, gifts from Canadian relatives, or distributions from Canadian family trusts. Form 3520 is how the IRS tracks these transactions. This guide explains how Canadian-specific rules interact with US Form 3520 filing requirements.
Country-Specific Guidance
Canadian inheritances are not taxable to the recipient under US law, but they must be reported on Form 3520 if the aggregate value from all foreign persons exceeds $100,000 in a tax year.
Canadian family trusts (inter vivos trusts, testamentary trusts) are often foreign trusts for US purposes. Beneficiaries who receive distributions must file Form 3520.
Canadian RESPs (Registered Education Savings Plans) may be foreign trusts. The subscriber (person who opens the plan) is treated as the owner for US tax purposes and may need to file Form 3520-A.
Canadian RRSPs and RRIFs are generally not foreign trusts under the Canada-US tax treaty, but they must be reported on FBAR and Form 8938. Form 8891 (or treaty election) is used to defer tax on RRSP income.
Gifts from Canadian corporations or partnerships have a lower threshold ($16,649 for 2026) and must be reported on Form 3520 regardless of the amount.
Common Mistakes
Failing to report a Canadian inheritance because Canada does not have an estate tax at the federal level.
Confusing RRSPs with foreign trusts — RRSPs are generally not trusts, but RESPs may be.
Not filing Form 3520-A for a RESP of which you are the subscriber.
Missing the lower threshold for gifts from Canadian corporations.
Filing Tips
Obtain a valuation of inherited Canadian property at the date of death for US basis purposes.
Keep records of all gifts and inheritances, including donor information, dates, and values in both CAD and USD.
If you receive a distribution from a Canadian trust, request a trust statement showing income character (interest, dividends, capital gains) for US tax purposes.
File Form 3520 with your Form 1040 by the extended due date. The $10,000 penalty applies even for non-taxable inheritances.
Frequently Asked Questions
Do I pay US tax on a Canadian inheritance?
No. The US does not tax the recipient of gifts or inheritances. However, you must report the inheritance on Form 3520 if the aggregate value from all foreign persons exceeds $100,000 in the tax year. The estate of the deceased may have Canadian or US estate tax obligations depending on their citizenship and residency.
Is my Canadian RRSP a foreign trust?
Generally no. Under the Canada-US tax treaty, RRSPs and RRIFs are recognized as pension arrangements, not trusts. You report them on FBAR and Form 8938, but not on Form 3520. Income inside the RRSP is deferred until distribution if you make the proper treaty election.
What about my Canadian RESP?
Canadian RESPs may be treated as foreign trusts for US tax purposes. The subscriber (the person who opened the plan and makes contributions) is generally treated as the owner and must file Form 3520-A annually. The beneficiary does not file Form 3520 for RESP distributions if the subscriber has filed Form 3520-A.
Need Help Filing Form 3520 from Canada?
FileAbroad specializes in U.S. expat tax filing. We help Americans in Canada navigate Form 3520, the FEIE, FBAR, and FATCA requirements.