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Form 3520 questions

I received a foreign inheritance from my late mother in the form of cash and property.  Questions about the form 3520:

 

My mom didn't have any trust. Is an individual will considered to be a trust?

****

1.  You are a U.S. owner of all or any portion of a foreign trust at any time during the tax year. Complete all applicable identifying information requested below and Part II of the form.
2. You are (a) a U.S. person (including a U.S. owner) or an executor of the estate of a U.S. person who, during the current tax year, received, directly or indirectly, a distribution from a foreign trust.

 

Am I number 1 or 2?

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Address of the trust.

 

My late mom's address?

***

 

Name of U.S. decedent?

 

She was a foreign citizen. Leave it blank?

****

Did you receive a Foreign Grantor Trust Beneficiary Statement from the foreign trust with respect to a distribution?

 

Is that the will?

*****

 

If I say i didn't get such statement, I have to file schedule A. 

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Number of years the trust has been a foreign trust, including the current tax year

 

The year when the will was written?

 

****

 

Thank you

 

 

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1 Best answer

Accepted Solutions
SusanY1
Employee Tax Expert

Form 3520 questions

Where the IRS uses the term "bequest", they mean for that to include inheritance. For assets that you inherit or receive as a gift, details such as the name of the decedent, date of the will, etc. aren't required to be included on the form.

The $100,000 is the combined total of cash and property, using the fair market value ("FMV" on the forms) of the property on the day that you received it. 

On line 54 you will list the date of death in column (a) as the "Date of gift or bequest", a description of what was received in column (b) (you can list "cash" for the cash and a brief description of the property "a home in Dubai" "land in Rome",  "2022 Toyota", etc.) and then in column (c) you list the amount of the cash (converted to USD) and the fair market value of the property. 

If multiple properties were inherited, list each of them on its own line. 

If you have more information to report than there are lines, just print the additional information in the same format on a plain piece of paper, include your name and social security number on that form, and include it when you file.  

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SusanY1
Employee Tax Expert

Form 3520 questions

A will isn't a trust, so you won't be 1 or 2.  Rather, you will check the box beside "You are a U.S. person who, during the current tax year, received certain gifts or bequests from a foreign person". 

From there you will populate lines 1a-1h with your information.  Then you will skip all the way to Part IV on Page 6 and provide information about the cash and property received on Line 54.  Skip all of those other questions in between!

Then sign and date the form at the bottom.

There is an awful lot on that form that doesn't apply in your situation, which makes it messier than it needs to be (and quite confusing!).  The good news, though, is that there are only a few data points that you need to worry about - all of the other stuff doesn't apply to you since you didn't receive a distribution from a trust.  

 

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Form 3520 questions

Thank you, Susan.

 

From part IV:

 

During your current tax year, did you receive more than $100,000 that you treated as gifts or bequests from a nonresident alien.

 

Is it $100,000 only in cash or combined cash and property?

 

Also, it doesn't say anything about the inheritance in this form. Is it because it doesn't matter?

 

Thank you again.

SusanY1
Employee Tax Expert

Form 3520 questions

Where the IRS uses the term "bequest", they mean for that to include inheritance. For assets that you inherit or receive as a gift, details such as the name of the decedent, date of the will, etc. aren't required to be included on the form.

The $100,000 is the combined total of cash and property, using the fair market value ("FMV" on the forms) of the property on the day that you received it. 

On line 54 you will list the date of death in column (a) as the "Date of gift or bequest", a description of what was received in column (b) (you can list "cash" for the cash and a brief description of the property "a home in Dubai" "land in Rome",  "2022 Toyota", etc.) and then in column (c) you list the amount of the cash (converted to USD) and the fair market value of the property. 

If multiple properties were inherited, list each of them on its own line. 

If you have more information to report than there are lines, just print the additional information in the same format on a plain piece of paper, include your name and social security number on that form, and include it when you file.  

**Say "Thanks" by clicking the thumb icon in a post
**Mark the post that answers your question by clicking on "Mark as Best Answer"

Form 3520 questions

Thank you, Susan. You are the best.

SusanY1
Employee Tax Expert

Form 3520 questions

You're most welcome!

**Say "Thanks" by clicking the thumb icon in a post
**Mark the post that answers your question by clicking on "Mark as Best Answer"
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