Hoping someone has experience in this domain!
I have a small 402(b) foreign employees compensatory trust. Basics of the plan is that I contribute $1 after payroll using elective deferral, and the employer contributes $0.5. My portion of the trust is consequently always 66.667%, and my employer's is 33.333%.
With that, IRC says that if employee contributions are non-incidental, and any part of grantor criteria apply (671-679), then my portion of the trust gets treated as a grantor trust.
I filled 3520-a (included activities of the WHOLE trust - including the employer portion).
And now I'm filling 3520. I'm just trying to understand if the trust is still considered a 402(b) (my portion too).
If my portion is still considered 402(b), then I don't believe contributions and distributions need to be reported on 3520 - just ownership on part II.
However, if my portion isn't treated as 402(b), I'm assuming I need to fill out the contribution and distribution sections. Is that correct?
And separately, on the 3502-a, is it appropriate that the balance sheet + income statement include the whole trust (not just my portion)? - and the U.S. Owner of Foreign Grantor Trust portion includes my distributions and Income Statement only, with the U.S. Beneficiary statement including the employer's portion?
Or do I cut out the employer portion entirely since including it may be considered "improper filing"?
Thanks!
