Reporting a foreign trust (3520 / 3520-A) — where does doing it myself start to cost money?
Some of it, yes — and we will say so on the call if that is the honest answer. The parts that are worth paying for are the ones where a missed election, a missed deadline or an unverified threshold costs more than the fee: creation, transfers, distributions and loans are reportable events, and the trust's annual return requires a statement for its US owner and beneficiaries.
What if I have already filed and got it wrong?
That is a common starting point. We re-derive the position, identify whether an amendment or a disclosure route is the right vehicle, and tell you which one preserves the relief that is still available. The order matters more than the speed.
How long will it take?
It depends on the documents rather than on us. Once the pack is complete most filings turn around inside a fortnight; anything that needs a certificate from a tax authority runs on that authority's timetable, which we tell you at the start rather than at the end.
Is my overseas retirement or education account a foreign trust?
It may be, and the label it carries locally is not the test. A number of overseas retirement, education and family savings arrangements have the characteristics the US definition of a trust looks for — property held by one person for the benefit of another, under terms that constrain what the holder may do with it. The fact that the local tax authority treats the account as an ordinary savings product does not settle the US question. The practical step is to obtain the constituting rules of the arrangement and read them against the US definition, before concluding that no reporting is due.
What is the difference between Form 3520 and Form 3520-A?
They report different things and they are filed by different people. Form 3520 is the US person's own return about their transactions with the trust — what they put in, what they took out, what they lent or borrowed. Form 3520-A is the trust's own annual return about its year, and it carries statements for the US owner and for beneficiaries who received distributions. Where a US person is treated as owning part of a foreign trust, responsibility for seeing that the trust's return is filed sits with them, even though the trustees are abroad and may be unwilling. Both have to be considered together.
My parents put money in a trust overseas for me — do I file?
Ask two questions in order. First, whether the arrangement is a trust for US purposes, which depends on its terms rather than on its name. Second, what you have actually received from it. Distributions to a US beneficiary are reportable events, and so are loans from the trust, which people rarely think of as distributions at all. Receiving nothing in a year does not always mean there is nothing to report, because ownership and transfers are reportable in their own right. Gather the deed, the account statements and the record of anything that has moved between you and the trust, and work from that.
The foreign trustees will not file anything — what do I do?
This is the most common practical problem on these engagements, and it does not remove the obligation. Where you are treated as the US owner of the trust, responsibility for the trust's annual return sits with you. In practice that means obtaining the trust's accounts from the trustees in whatever form they keep them, rebuilding the year on a US basis, and preparing the return together with the statements for the owner and the beneficiaries. Where the trustees will not co-operate at all, the requests and the refusals should be documented in writing and the filing prepared from whatever records can be obtained. Ask in writing, and keep the reply.
Does a loan from a foreign trust count as a distribution?
Loans are among the events these forms are concerned with, which surprises most people. Money moving out of a trust to a US person under a loan agreement still leaves the trust and still ends up in the beneficiary's hands, and the reporting rules are concerned with the movement rather than with the label on the paperwork. The same applies in the other direction: a loan made to the trust by a US person is a transfer to be reported, not a neutral financing arrangement. If anything has moved between you and the trust in either direction, list it before concluding it falls outside the rules.
I have never filed these forms — how far back do I go?
That is a judgement to make with advice rather than a number to pick. The scope of a catch-up depends on when the arrangement began, when you became a US person, what happened in each year, and what records survive. The work usually starts by building a year-by-year chronology of transfers, distributions and loans from bank and trustee records, because until that exists nobody can say which years contain a reportable event and which do not. A year in which no tax was due can still contain something that had to be reported, which is why the chronology comes before the forms.
Is my Indian provident fund or PPF still tax-free now that I live abroad?
The exemption is an Indian one, and it does not travel. Your new country of residence taxes worldwide income under its own rules, and several — the United States in particular — may treat the annual growth in a foreign retirement or savings plan as currently taxable and separately reportable, whether or not you withdrew anything. So an account that is genuinely tax-free in India can be a taxable, reportable asset where you now live. See Indian pensions received abroad.
Who has to file an FBAR?
A US person whose foreign financial accounts, added together, exceed the reporting threshold at any point in the year — measured on the aggregate high balance, not on year-end value, and not on income. It captures accounts you merely have signature authority over, so business and family accounts are frequently missed. It is filed with FinCEN separately from the tax return, and its penalties are separate too. See FBAR — FinCEN 114.
