Get IRS 3520-A 2017

Form 3520 is an information return, not a tax return, because foreign gifts are not subject to income tax. However, there are significant penalties for failure to file Form 3520 when it is required.

Purpose of Form Form 3520-A is the annual information return of a foreign trust with at least one U.S. owner.

You must file Form 3520, Annual Return to Report Transactions with Foreign Trusts and Receipt of Certain Foreign Gifts, if, during the current tax year, you treat the receipt of money or other property above certain amounts as a foreign gift or bequest.

A foreign grantor trust with a U.S. owner must file a Form 3520-A, and it is generally filed by the trustee of the foreign trust.

In general, Form 3520 is due on the date that your income tax return is due, including extensions. The Form 3520-A, in contrast, is required to be filed on or before March 15 of each year for the preceding year. The difference in the filing dates is confusing and a trap for the unwary.

IRS Form 3520 is required if you receive more than $100,000 from a nonresident alien or a foreign estate. In addition, gifts from foreign corporations or partnerships are subject to a lower threshold that is adjusted for inflation each year. For 2016, gifts of more than $15,671 trigger the filing requirement.

Although gifts or inheritances from foreign persons are not subject to income tax or an inheritance tax, if the gifts of money or other property are valued over certain amounts, the recipient the gifts must report them to the IRS.

Otherwise, you must file IRS Form 3520, the Annual Return to Report Transactions With Foreign Trusts and Receipt of Certain Foreign Gifts. Tangible personal property, including real estate, is normally U.S. situs property, whereas many intangible assets, such as stock in foreign corporations, are not.

The short answer is that the U.S. doesn't impose inheritance taxes on bequests. Similarly, transfers by gift of property not situated in the U.S. from foreign nationals not domiciled in the U.S. are not subject to U.S. gift taxes. However, many other U.S. tax rules may apply to such a gift or inheritance.

While you may not need to pay tax on large sums of money being sent abroad, some governments will require you to file a declaration that you are bringing the money into the country. Failing to declare the assets could result in a fine.

Foreign citizens generally don't have liability for U.S. gift tax and therefore don't need to report gifts for those purposes. However, separate IRS regulations require recipients to report a foreign cash gift. IRS Form 3520 is required if you receive more than $100,000 from a nonresident alien or a foreign estate.

However, if you're gifting to parents living overseas, you'll need to pay close attention to the maximum gift you're allowed before taxes kick in. ... But you can currently gift up to $11.4 million from your estate over your lifetime, so you likely won't be required to pay tax on any amount you send from the U.S.

However, you may be required to furnish proof that you paid any estate or gift tax to a foreign government. While you may not need to pay tax on large sums of money being sent abroad, some governments will require you to file a declaration that you are bringing the money into the country.

Do I have to pay tax on money transferred from overseas? ... If you are a non-resident, you will not need to pay UK tax on your foreign income. In case of a UK resident, however, foreign income will usually be taxable. Moreover, if your permanent residence is in another country, you may not have to pay tax.

If you're lucky enough and generous enough to use up your exclusions, you may indeed have to pay the gift tax. The rates range from 18% to 40%, and the giver generally pays the tax. There are, of course, exceptions and special rules for calculating the tax, so see the instructions to IRS Form 709 for all the details.