1.a. Bank interest does go on a 1099-INT.
b. Box 6 is for foreign tax paid is a good place to enter the income. It tells the program to give you a foreign tax credit.
c. If the amount of all foreign tax is below $300, you take the credit without having to file Form 1116.
d. Yes, you are using box 6 to get the foreign tax and you might need to go through the foreign tax credit to select a credit, if the total foreign tax paid is over $300. Otherwise, the program will do it all for you.
2. a. One of the most important questions according to the IRS. Check that you have a financial account in a foreign country.
b. Also important, check that you have authority over your bank account in a foreign country. Both should be marked.
3. a. No, a foreign bank is not a foreign trust.
b. It does not sound like you run or own the trust, just a beneficiary. Here is the form and instructions for you to verify that it is not needed in your scenario. About Form 3520, Annual Return To Report Transactions With Foreign Trusts and Receipt of Certain For...
You may need to file Form 8936 and/ or FBAR. Here is a comparison of the FATCA (Form 8938) and FBAR requirements. The FBAR is not part of the tax return. It is filed separately. File FBAR through the Financial Crimes Enforcement Network.
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