IRS Form
IRS Form 3520: Foreign Trusts and Large Foreign Gifts
IRS Form 3520 is the information return US persons use to report transactions with foreign trusts and the receipt of large gifts or bequests from foreign persons. It gives the IRS visibility over cross-border trust arrangements and substantial foreign transfers.
Overview
What Form 3520 is
Form 3520 is an information return that reports certain dealings between US persons and foreign trusts, as well as the receipt of large gifts or bequests from foreign individuals and estates. It is a disclosure document rather than a calculation of tax owed on the transactions it describes.
Its purpose is transparency. By requiring these events to be reported, the form gives the IRS a window into arrangements that cross borders and that might otherwise be invisible to the US tax system.
Why it exists
Foreign trusts and large foreign gifts sit at the edge of the US tax system. A trust established under another country’s law, or a substantial gift from a person outside the United States, involves value moving across a border in a way that ordinary income reporting would not capture.
Form 3520 exists to close that gap. It ensures that the creation of, transfers to, and distributions from foreign trusts are visible, and that significant gifts and inheritances from abroad are on record, supporting the wider framework of foreign asset transparency.
Who generally files it
- US persons who create or transfer assets to a foreign trust.
- US persons who receive distributions from a foreign trust.
- US persons treated as owners of a foreign trust under the grantor trust rules.
- US persons who receive large gifts or bequests from foreign individuals or estates.
Process
How it fits into the filing process
Identify the reportable event
Determine whether a foreign trust transaction or a large foreign gift has occurred during the period.
Establish your role
Clarify whether you are a grantor, transferor, beneficiary, or recipient, as this shapes what is reported.
Coordinate with Form 3520-A
Where a foreign trust with a US owner is involved, the annual trust return is prepared alongside this filing.
File with the wider return
The completed information return accompanies the individual US filing for the year.
Key facts
- Form type
- Information return
- Covers
- Foreign trusts and large foreign gifts
- Paired with
- Form 3520-A for certain foreign trusts
- Purpose
- Transparency over cross-border transfers
How it relates to other filings
Form 3520 is closely tied to Form 3520-A, which is the annual information return for certain foreign trusts with a US owner. Together they form a pair: one reports the individual’s side of the arrangement, and the other reports the trust’s annual activity. Both sit within the wider ecosystem of foreign asset reporting that accompanies the main US individual tax return.
Frequently asked questions
Form 3520 is an information return US persons use to report certain transactions with foreign trusts and the receipt of large gifts or bequests from foreign persons.
It exists to give the IRS visibility over foreign trust arrangements and substantial foreign gifts, areas that would otherwise be difficult to monitor and that carry a risk of untaxed transfers.
US persons who create, transfer to, or receive distributions from a foreign trust, and US persons who receive large gifts or inheritances from foreign individuals or estates, generally file it.
It is an information return that accompanies the wider US filing and is closely paired with Form 3520-A, which covers the annual reporting for certain foreign trusts.
Involved with a foreign trust or large gift?
Foreign trust and gift reporting is nuanced. We can help you understand whether Form 3520 applies to your situation.