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nanr93
New Member

I sent money to a foreign bank account (my own account) to pay debts. Do I have to file form 3520?

I lived overseas for many years and still have a bank account and other financial holdings in that country. I sent a couple thousand dollars to my foreign account in 2016 to pay down debts I owe in that country. Do I have to file 3520?
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GeoffreyG
New Member

I sent money to a foreign bank account (my own account) to pay debts. Do I have to file form 3520?

Form 3520 (Annual Return To Report Transactions With Foreign Trusts and Receipt of Certain Foreign Gifts) is only required to be filed if you were the recipient of a gift(s) from a foreign national(s) in annual excess of $100,000, or if you were the owner of a foreign trust account or entity, or had financial interactions with such a foreign trust.

It does not apply to any other foreign bank or financial accounts, or to the many other circumstances that a US taxpayer may have, or encounter, with overseas financial transactions.

For the specific example of your case, if you simply moved money from a US-based account into a foreign account (or from one foreign account to another), and that process did not involve a trust entity organized under the laws of a foreign country, then you have no filing obligation for Form 3520.

However, assuming that you own a bank account or maintain other financial assets in a foreign country, there are certain other foreign financial account reporting requirements that you must meet, in addition to filing a primary tax return (Form 1040, etc., and aside from Form 3520.

In fact, there are two separate disclosure forms that may be required for foreign accounts; each also has different reporting rules.  One is known as IRS Form 8938, and can be attached to the taxpayer's relevant yearly Form 1040 tax return.  The other is FinCen Form 114, which can only be filed via the internet.  The following Internal Revenue Service webpage describes them in some detail, and provides their dollar value reporting levels:

https://www.irs.gov/businesses/comparison-of-form-8938-and-fbar-requirements

 

Form 8938 is included in TurboTax.  FinCen Form 114 is not included in TurboTax, and you would need to access that reporting webpage separately, if your foreign financial assets total over the limit(s).  Note that you can get to the FinCen reporting internet site directly through the above IRS link.


Thank you for asking this important question.

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GeoffreyG
New Member

I sent money to a foreign bank account (my own account) to pay debts. Do I have to file form 3520?

Form 3520 (Annual Return To Report Transactions With Foreign Trusts and Receipt of Certain Foreign Gifts) is only required to be filed if you were the recipient of a gift(s) from a foreign national(s) in annual excess of $100,000, or if you were the owner of a foreign trust account or entity, or had financial interactions with such a foreign trust.

It does not apply to any other foreign bank or financial accounts, or to the many other circumstances that a US taxpayer may have, or encounter, with overseas financial transactions.

For the specific example of your case, if you simply moved money from a US-based account into a foreign account (or from one foreign account to another), and that process did not involve a trust entity organized under the laws of a foreign country, then you have no filing obligation for Form 3520.

However, assuming that you own a bank account or maintain other financial assets in a foreign country, there are certain other foreign financial account reporting requirements that you must meet, in addition to filing a primary tax return (Form 1040, etc., and aside from Form 3520.

In fact, there are two separate disclosure forms that may be required for foreign accounts; each also has different reporting rules.  One is known as IRS Form 8938, and can be attached to the taxpayer's relevant yearly Form 1040 tax return.  The other is FinCen Form 114, which can only be filed via the internet.  The following Internal Revenue Service webpage describes them in some detail, and provides their dollar value reporting levels:

https://www.irs.gov/businesses/comparison-of-form-8938-and-fbar-requirements

 

Form 8938 is included in TurboTax.  FinCen Form 114 is not included in TurboTax, and you would need to access that reporting webpage separately, if your foreign financial assets total over the limit(s).  Note that you can get to the FinCen reporting internet site directly through the above IRS link.


Thank you for asking this important question.

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