Does the trust file Form 3520-A, or do I?
The trust files, and you carry the consequence if it does not. That is the whole shape of this obligation, and it catches people who read the instructions literally: the return is the trust's annual information return, but the reporting duty is enforced against the US owner, who is expected to see that it is filed. In practice that means a US person with an interest in a foreign structure has to obtain accounts from trustees who have no US reporting habit, restate them on a US basis, and get the return in on the trust's behalf. Treating it as somebody else's filing is the most common way a year goes missing.
Is a family settlement abroad a foreign trust for US purposes?
Often, and the word nobody used is irrelevant. A great many ordinary arrangements abroad — a settlement holding property for the next generation, a nominee holding shares for relatives, certain retirement and education vehicles — are trusts for US purposes even though the family, the lawyer who drew the deed and the local tax authority all call them something else. What decides it is what the arrangement does rather than what it is called: whether property is held by one person for the benefit of another, on terms somebody set. So the first piece of work is never the form. It is reading the deed, the resolutions and the actual pattern of payments. Reporting a foreign trust sets out what follows.
Who counts as the US owner of a foreign trust?
Ownership here is not the same idea as ownership in a deed, which is why people answer this wrongly about their own family. The return applies to a foreign trust treated as a grantor trust with a US owner, and the owner is the US person the trust's income is attributed to — typically whoever settled property on it, and sometimes a person who retained rights over it or who funded it indirectly. So the answer turns on who put what in and what they kept, not on who is named as trustee or who actually receives the money. We establish that from the deed, the funding history and the pattern of distributions, and only then decide who files what.
The foreign trustees will not file anything — where does that leave me?
In the ordinary position rather than an unusual one, and no further from the obligation. Trustees abroad are generally answerable to their own authorities and not to anybody else's, and many will decline to sign a return addressed to a foreign tax administration. What can be done is to obtain the underlying material the return needs — the trust's income, its distributions, the identity of its US beneficiaries — restate it on a US basis, and file in the capacity available to the owner. Where the trustees will not cooperate at all, every request made and every answer received is recorded as it happens, because that record is the only material a later reasonable-cause argument can be built from.
Could my retirement arrangement abroad be a foreign trust?
Possibly, and the answer is not the same for every arrangement or every country. Some retirement and education vehicles hold property for a named beneficiary on terms set by somebody else, which is the shape of a trust whatever the local label says. Others sit closer to a contract with an institution. Whether a treaty article reaches the arrangement at all is part of the same question, and it can affect the reporting as well as the tax. So the vehicle has to be read rather than classified from its name: the governing document, who contributes, who controls the investments, and what the beneficiary can actually demand. We form that view in writing, because the year's reporting depends on it.
Do I need Form 3520 as well as Form 3520-A?
They are different filings with different filers, and a US owner of a foreign trust commonly has both in the same year. One is the trust's own annual information return, covering its income, its distributions and its US beneficiaries. The other is the US person's own return of transactions with the trust — what went in, what came out — and of receipts from foreign persons more generally. The figures have to agree, and that is where the work is: a distribution shown one way in the trust's return and another way in the owner's is the inconsistency an examiner reads first. We prepare them together from one restated set of accounts. The second is covered at foreign gifts and trusts.
Do I have to declare my dual citizenship?
A tax return does not generally ask you to declare which passports you hold; it asks about residence, and in the US case it applies to citizens by definition. What does ask is your bank. Account-opening self-certification under FATCA and the Common Reporting Standard asks which countries you are a tax resident or citizen of, and the answer is reported onward to the tax authority. So the practical answer is that the information arrives either way. See FATCA reporting.
Do foreign shares, ESOPs and RSUs count as foreign assets in an Indian return?
Yes. Equity held directly, shares acquired under an employee plan once they have vested to you, units in foreign funds, the custodial account they sit in and the foreign bank account that funds it are all disclosable by a resident — separately, with acquisition cost, peak value and income for the year. This is where returning employees of multinational groups most often have a gap, because the plan administrator reports to the employer, not to you. See Schedule FA reporting.
