Form 3520 Guide for Tax Professionals
Who must file, foreign gift and inheritance thresholds (including related-donor aggregation), foreign trust reporting and the substitute Form 3520-A, penalties, deadlines, e-filing, and where to mail. Verify current IRS instructions and the facts of each client’s situation.
Last reviewed October 7, 2026 against the Instructions for Form 3520 (Rev. December 2025).
Who Must File Form 3520
Form 3520 is an annual information return filed by U.S. persons who had certain transactions with foreign trusts or received certain large gifts or bequests from foreign persons. A separate Form 3520 is filed for transactions with each foreign trust. Each Part covers a different reporting event:
| Part | Reporting event | Statute |
|---|---|---|
| Part I | Transfers by a U.S. person to a foreign trust (including certain transfers for qualified obligations) | § 6048(a) |
| Part II | U.S. owner of any part of a foreign trust under the grantor trust rules (§§ 671–679), even if there were no transactions during the year | § 6048(b) |
| Part III | Distributions received from a foreign trust, including loans of cash or marketable securities and uncompensated use of trust property | § 6048(c) |
| Part IV | Gifts or bequests received from foreign individuals, foreign estates, foreign corporations, or foreign partnerships above the thresholds | § 6039F |
Certain tax-favored foreign retirement and savings trusts are exempt from foreign trust reporting under Rev. Proc. 2014-55, Rev. Proc. 2020-17, and proposed regulations under § 6048. See our foreign retirement accounts guide. Spouses filing a joint income tax return who are both transferors, grantors, or beneficiaries of the same foreign trust may file a joint Form 3520.
Foreign Gifts & Bequests (Part IV)
Under IRC § 6039F, a U.S. person reports on Part IV of Form 3520 gifts and bequests received from foreign persons during the tax year when either threshold is met. The thresholds are measured by donor group, not by adding together every foreign gift received from unrelated people.
• Nonresident alien individuals and foreign estates (line 54):
Report if the U.S. person received more than $100,000 treated as gifts or bequests from a nonresident alien individual or a foreign estate, including foreign persons related to that donor. If the threshold is met, each gift or bequest over $5,000 is itemized (date, description, fair market value). If none exceeds $5,000, the instructions call for entering “No gifts or bequests exceed $5,000.”
• Foreign corporations and foreign partnerships (line 55):
Report if purported gifts from foreign corporations or foreign partnerships (including foreign persons the recipient knows or has reason to know are related to them) exceed the inflation-adjusted § 6039F threshold: $20,116 for 2025 (Rev. Proc. 2024-40) and $20,573 for 2026. Each gift is itemized. These purported gifts are subject to recharacterization by the IRS under § 672(f)(4).
Related-donor aggregation
To apply the $100,000 test, gifts from different nonresident aliens and foreign estates are added together if the recipient knows or has reason to know the donors are related to each other, or if one is acting as a nominee or intermediary for the other. A related person generally means a person related for purposes of §§ 267 and 707(b), which includes family members such as spouses, siblings, ancestors, and lineal descendants.
Reportable
$75,000 from a nonresident alien mother and $40,000 from her nonresident alien husband. The donors are related, so the $115,000 total exceeds $100,000 and both gifts are itemized.
Not reportable on Part IV
$60,000 from a nonresident alien relative and $60,000 from an unrelated nonresident alien friend. Neither donor group exceeds $100,000 (absent a nominee arrangement).
Line 56 asks whether the recipient has any reason to believe a foreign donor was acting as a nominee or intermediary for another person. If the ultimate donor is a foreign trust, the amount is reported as a trust distribution in Part III instead.
Foreign gifts and bequests are generally not taxable income to the recipient, but failure to report them can result in penalties, and the IRS may determine the income tax consequences of an unreported gift. See Penalties and our § 6039F thresholds article.
Gift vs. Inheritance vs. Trust Distribution
Gifts and bequests share the same Part IV thresholds and are aggregated together. What changes the reporting is who the money comes from and through what vehicle, not what the family calls it:
| Source of the funds | Where it is reported |
|---|---|
| Lifetime gift from a nonresident alien individual | Part IV, line 54 (if the donor group exceeds $100,000) |
| Inheritance paid by a foreign estate | Part IV, line 54 as a bequest (same $100,000 test) |
| Inheritance or other payment from a foreign trust, including a trust created at death | Part III as a distribution, not Part IV, even when a foreign person is treated as the trust’s owner |
| Distribution from a domestic trust treated as owned by a foreign person | Part IV as a gift from a foreign person (the foreign owner), not Part III |
| Contribution by a foreign person to a domestic or foreign trust with U.S. beneficiaries | Not reported by the beneficiaries in Part IV, unless a beneficiary is treated as receiving it in the year of the transfer (for example, as the section 678 owner of that portion); that beneficiary reports it in Part IV as a gift from the contributor |
| Contribution by a foreign person to a domestic trust not treated as owned by anyone | Part IV of the trust’s own Form 3520, as a gift to the trust (Agena prepares this return) |
| Contribution by a foreign person to a domestic trust treated as owned by a foreign person | Not reported by the trust |
| Purported gift from a foreign corporation or partnership | Part IV, line 55 (inflation-adjusted threshold; may be recharacterized) |
| Gift or bequest from a U.S. citizen or resident living abroad, or from a U.S. decedent’s estate | Not a foreign gift; not reported in Part IV |
| Tuition or medical expenses paid directly on the U.S. person’s behalf (qualified payments) | Not treated as a gift for Part IV |
| Gift or bequest from a covered expatriate | Part IV, and possibly Form 708 under § 2801 |
The trust rows follow Notice 97-34, Section VI.A, which the Form 3520 instructions repeat. A foreign person can be treated as a trust’s owner only in the narrow cases in IRC § 672(f)(2), such as a trust the grantor can revoke.
For gifts and bequests from covered expatriates, see our § 2801 and Form 708 guide and Form 708 preparation.
Foreign Trust Reporting (Parts I, II & III)
- Part I: Transfers by U.S. persons to foreign trusts during the tax year. Most fair market value transfers are excepted, but some (for example, transfers for qualified obligations or by a U.S. person related to the trust) must still be reported.
- Part II: U.S. owner of a foreign trust under the grantor trust rules. Part II must be completed even if there were no transactions during the year, and the U.S. owner is responsible for ensuring the trust files Form 3520-A.
- Part III: Distributions from a foreign trust, including constructive distributions such as trust-paid credit card charges, loans of cash or marketable securities, and uncompensated use of trust property. See Distributions From a Foreign Trust: Form 3520 Part III.
Substitute Form 3520-A
If the foreign trust does not file Form 3520-A, the U.S. owner completes a substitute Form 3520-A to the best of their ability and attaches it to their own Form 3520. Per the instructions:
- It is due with the U.S. owner’s Form 3520 (for example, April 15 for an individual, plus extensions), not the trust’s March 15 Form 3520-A due date. Attached by that date, it is considered timely.
- The U.S. owner checks the “Substitute Form 3520-A” box at the top of the form, signs it, and enters their name and TIN on the “Title” line of the signature box.
- The Foreign Grantor Trust Owner Statement and Beneficiary Statement are included, and copies are furnished to the U.S. owners and U.S. beneficiaries by the Form 3520 due date.
- If the trust has no U.S. agent, the IRS may redetermine the amounts the U.S. owner takes into account. See § 6048(b)(2).
Read our step-by-step practitioner walkthrough on trust EINs, mandatory attachments when there is no U.S. agent, balance sheet valuation, and TFSA reporting.
Form 3520 Penalties
Penalties apply if Form 3520 or Form 3520-A is not timely filed or is incomplete or incorrect. Only a complete Form 3520, with all required attachments, is considered timely filed.
Part IV: Foreign Gifts & Bequests
IRC § 6039F(c)
5% of the amount of the foreign gifts for each month the failure to report continues, up to 25% in total. The IRS may also determine the income tax consequences of the receipt.
Parts I & III: Transfers & Distributions
IRC § 6677(a)
The greater of $10,000 or 35% of the gross value of property transferred to the trust (Part I) or of distributions received (Part III).
Part II & Form 3520-A: Ownership
IRC § 6677(b)
The greater of $10,000 or 5% of the gross value of the trust assets treated as owned by the U.S. person, if the trust fails to timely file Form 3520-A and furnish the annual statements, or omits or misstates required information. The U.S. owner is liable.
- Continuing penalties (§ 6677 only): if noncompliance continues more than 90 days after the IRS mails a notice, an additional $10,000 applies for each 30-day period (or fraction). Once the IRS can determine the gross reportable amount, the total § 6677 penalties are limited to that amount. Part IV penalties under § 6039F have no continuing-penalty component; they stop at 25%.
- Reasonable cause: no penalty applies if the failure was due to reasonable cause and not willful neglect (§ 6677(d); § 6039F(c)(2)). Under § 6677(d), the fact that a foreign country would penalize disclosure is not reasonable cause, and the instructions add that a foreign fiduciary’s reluctance or trust provisions preventing disclosure are not reasonable cause either.
- Statute of limitations: if a complete Form 3520 is not filed, the assessment period for tax related to the Parts I–III information stays open until 3 years after the information is reported (§ 6501(c)(8)).
- Accuracy penalty: the 20% § 6662 penalty may increase to 40% under § 6662(j) for underpayments tied to assets that should have been reported on Form 3520-A.
For relief requests, see our reasonable cause guide and the Huang case analysis.
Deadlines & Extensions
| Return | Due date (calendar year) | Extension |
|---|---|---|
| Form 3520 (individual) | April 15 (15th day of the 4th month) | To October 15 if an income tax return extension is granted (for example, Form 4868). No separate Form 3520 extension form; check box 1k and enter the extension form number. |
| Form 3520 (living or serving abroad) | June 15, with a statement showing the filer qualifies | To October 15 with an income tax return extension |
| Form 3520 (U.S. decedent) | 15th day of the 4th month after the decedent’s last tax year | To the 15th day of the 10th month if the decedent’s income tax return is extended |
| Substitute Form 3520-A | Same as the U.S. owner’s Form 3520 | Follows the Form 3520 extension |
| Form 3520-A (filed by the trust) | March 15 (15th day of the 3rd month after the trust’s year ends) | 6 months (to September 15) with Form 7004, code 27, filed by the original due date. Form 4868 does not extend Form 3520-A. |
If a due date falls on a Saturday, Sunday, or legal holiday, file by the next business day. For actual year-by-year calendar dates accounting for holidays and postponements from 2019 to 2026, see our reference table in Form 3520 & 3520-A Due Dates by Year.
Can Form 3520 Be E-Filed?
No. Form 3520 is filed on paper. It is mailed separately to the IRS in Ogden, Utah, and is not attached to or e-filed with Form 1040. The IRS instructions note that e-signatures are accepted on the form. The Form 3520-A extension is different: Form 7004 with code 27 can be e-filed.
Agena Software generates a printable Form 7004 for Form 3520-A today. Direct Form 7004 e-filing is planned once IRS certification is complete. See Form 3520-A and read our comprehensive analysis on Can Form 3520 or 3520-A Be E-Filed? Current IRS Filing Methods.
Where to mail Form 3520
P.O. Box 409101
Ogden, UT 84409
- Do not attach Form 3520 to the income tax return. A substitute Form 3520-A, with its owner and beneficiary statements, is attached to Form 3520.
- Under § 7502, a properly addressed return mailed by U.S. mail is generally treated as filed on the postmark date. Certified mail with a postmarked receipt is common proof of timely mailing. Private delivery services qualify only if IRS-designated, and a P.O. box cannot accept private delivery.
- Verify the current address and delivery rules in the latest IRS instructions before mailing.
Frequently Asked Questions
Can Form 3520 be e-filed?
No. Form 3520 is a paper return mailed separately to the IRS at P.O. Box 409101, Ogden, UT 84409. It cannot be e-filed with Form 1040. Form 7004 extensions for Form 3520-A (code 27) can be e-filed.
How do you extend Form 3520-A?
File Form 7004 using code 27 by the 15th day of the 3rd month after the trust’s tax year ends (March 15 for a calendar-year trust) for an automatic 6-month extension. Form 4868 does not extend Form 3520-A. A substitute Form 3520-A follows the U.S. owner’s Form 3520 due date instead.
How do you extend Form 3520?
There is no separate extension form. If the U.S. person is granted an extension for the income tax return (for example, Form 4868), Form 3520 is due by the 15th day of the 10th month after the tax year ends (October 15 for calendar-year individuals).
Who must file Form 3520?
U.S. persons who transferred property to a foreign trust, were treated as owners of a foreign trust, received a distribution from a foreign trust, or received more than $100,000 in gifts or bequests from a nonresident alien or foreign estate (aggregating related donors), or purported gifts above the inflation-adjusted threshold from foreign corporations or partnerships.
Is the $100,000 threshold per donor or total?
Per donor, but gifts from donors the recipient knows or has reason to know are related to each other (or acting as nominees for each other) are added together. Gifts from unrelated foreign individuals are not combined.
Is an inheritance from abroad reported the same way as a gift?
A bequest from a foreign estate is reported in Part IV under the same $100,000 test as a gift. Amounts received from a foreign trust are distributions reported in Part III. An inheritance from a U.S. citizen or resident’s estate is not a foreign bequest, even if the decedent lived abroad.
What is the penalty for filing Form 3520 late?
For Part IV gifts and bequests, 5% of the gift amount per month the failure continues, up to 25% (§ 6039F). For Parts I and III, the greater of $10,000 or 35% of the gross reportable amount (§ 6677(a)). For foreign grantor trusts, the greater of $10,000 or 5% of the trust assets treated as owned (§ 6677(b)). Reasonable cause can prevent the penalty.
Where do you mail Form 3520?
Internal Revenue Service Center, P.O. Box 409101, Ogden, UT 84409. It is mailed separately from the income tax return.
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