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Federal input screens

Screen 3520-3 - Form 3520-A, Return of Foreign Trust with U.S. Owner (1040)

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Form 3520-A - General Information

Form 3520-A will print if code
2
 is selected in the
Did foreign trust file Form 3520-A
 field on the 3520-2 screen.
Tax year beginning / ending
The application defaults to a calendar year end. Note that the tax year-end date for fiscal year returns must be changed by entering in the
Tax year ending, if other than 12/31
 field.
The application then calculates the
Tax year beginning
 field as twelve months prior to the date entered in the
Tax year ending
 field. If the return is a short tax year for the current tax period, enter the beginning and ending dates for the tax period. If these fields are blank, the application assumes that the tax period is a full 12 months.
Transfers of property to another person
The application marks Form 3520-A, line 5 “Yes” and print the description in a statement attached to Form 3520-A.

Foreign Trust Income Statement

In the
Foreign Trust
 columns, enter the total amounts received or paid/incurred by the trust during the tax year. This will appear on Form 3520-A, Part II. In the
Attributable to U.S. Owner
 columns, enter only the portion of income and expenses deemed attributable to the filer, if a U.S. owner. This will appear on the Foreign Grantor Trust Owner Statement.
Partnership & fiduciary income (loss)
If the trust received a Schedule K-1 from a partnership, S corporation, or other flow-through entity, use the corresponding lines on Form 3520-A to report the interest, dividends, capital gains, etc., from the flow-through entity.
Other income
Enter other items of income not previously included.
note
Ordinary income reported on Form 1099-R, Distributions From Pensions, Annuities, Retirement or Profit-Sharing Plans, IRAs, Insurance Contracts, etc. is to be entered here.
Total distributions
Use this statement to enter information for all distributions (including the uncompensated use of trust property) to each U.S. owner, U.S. beneficiary, and foreign person other than the filer. The information that follows describes some of the fields that appear in the attached statement.
  • Recipient Name: Enter the name of the recipient.
  • Person Type: Enter
    1
     if the recipient is a U.S. owner. Enter
    2
     if the recipient is a U.S. beneficiary. Enter
    3
     if the recipient is a foreign person.
  • ID#: Enter the identification number, if any.
  • Date of Distribution: Enter the date of the distribution.
  • FMV: Enter the fair market value of the distribution.
The application reports the distributions in this statement as well as the distributions to the filer entered on the 3520-2 screen,
Cash or FMV of property received from foreign trust and Loans from related foreign trust
 on Form 3520-A, line 17.

Foreign Trust Assets

In the
Beginning of Year
 column, enter the amount balance as of the beginning of the foreign trust tax year. In the
End of Year
 column, enter the amount balance as of the end of the foreign trust tax year. The application proformas the
End of Year
 column amounts to the
Beginning of Year
 column in the next year.

Foreign Trust Liabilities and Net Worth

Maximum amount for foreign trust balance sheet rounding
Enter an out-of-balance threshold. The application then completes an out-of-balance adjustment up to the amount you specify. The application does not complete an adjustment if Part III is out of balance by more than the amount in this field. The application either automatically creates an adjustment to accounts payable or, if there is no balance in accounts payable, it adjusts cash to correct an out-of-balance condition between assets and liabilities.
If you do not want the application to make any automatic adjustment, enter
0
 (zero), or leave this field blank.

Foreign Grantor Trust Statements

The information entered in this section will display on Form 3520-A (if calculating) on either page 3 or 4 depending on the reason(s) for filing entered on the 3520 screen. Page 3 calculates if the
U.S. owner of all or any portion of a foreign trust
 field is marked. Page 4 calculates when the
U.S. owner of all or any portion of a foreign trust
 field is not marked, and when the
U.S. person who received a distribution from a foreign trust, or who is a grantor or beneficiary of a foreign trust from which a loan or uncompensated use of trust property was received
 field is marked.
Explanation of facts & law establishing foreign trust ownership
Enter an explanation of the facts and law (including the section of the Internal Revenue Code) that establishes that the foreign trust (or portion of the foreign trust) is treated for U.S. tax principles as owned by either:
  • The filer, if a U.S. owner, or
  • Another person, if the filer is a U.S. beneficiary

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