CPA-Prepared Form 3520 for Foreign Gifts, Foreign Trusts, and Foreign Inheritances

Form 3520 is a penalty-sensitive international information return used to report certain transactions with foreign trusts, ownership of foreign trusts, and receipt of certain large foreign gifts or bequests. The IRS states that U.S. persons and executors of estates of U.S. decedents use Form 3520 for these reporting categories.

This service is designed for taxpayers who need a CPA-prepared Form 3520 filing position based on the source of the funds, relationship to the foreign person or trust, applicable reporting threshold, foreign trust status, and interaction with the rest of the U.S. tax return.

Who This Is For

This service is for taxpayers who received or were involved with:

Foreign gifts
Foreign inheritances or bequests
Foreign trust distributions
Transfers to a foreign trust
Ownership of a foreign trust
Foreign grantor trust activity
Foreign family trust arrangements
Foreign estate distributions
Large transfers from non-U.S. relatives
Foreign corporation or foreign partnership gifts
Possible Form 3520-A overlap

Foreign gift reporting is especially important because gifts or bequests from a nonresident alien or foreign estate generally must be reported when the aggregate amount exceeds $100,000 during the year. Gifts from foreign corporations or foreign partnerships have a lower annual threshold: $20,116 for 2025 and $20,573 for 2026.

What You Get

You receive a CPA-prepared Form 3520 filing position based on your facts and circumstances.

This may include:

Form 3520 preparation
Foreign gift or inheritance reporting review
Foreign trust transaction review
Foreign trust ownership review
Foreign trust distribution review
Threshold analysis
Donor / transferor / beneficiary classification
Related-party aggregation review
Form 3520-A coordination where applicable
Penalty-risk awareness
Coordination with Form 1040 and other international filings where applicable

Pricing Mention

This is priced as a defined CPA international reporting outcome, not simple form entry.

The value is in determining which part of Form 3520 applies, whether the reporting threshold is met, whether a transaction is a gift, bequest, trust distribution, or transfer, and whether related filings such as Form 3520-A, Form 8938, FBAR, or Form 709 may need to be considered.

How It Works

1. Transaction Review

We review what was received or transferred, who sent it, where it came from, and whether the source was an individual, estate, trust, corporation, partnership, or other foreign person.

2. Filing Trigger Analysis

We determine whether the facts indicate a Form 3520 reporting requirement, including foreign gift thresholds, foreign trust distributions, ownership, or transfers to a foreign trust.

3. Classification Review

We evaluate whether the item is more appropriately treated as a foreign gift, bequest, trust distribution, trust ownership event, or another reportable transaction.

4. Form Preparation

The applicable parts of Form 3520 are prepared based on the transaction type, amount, parties involved, dates, and required disclosures.

5. Related Filing Coordination

Where applicable, Form 3520 is coordinated with Form 3520-A, Form 8938, FBAR, Form 1040, foreign income reporting, trust reporting, or gift tax considerations.

Technical Explanation

Form 3520 is separate from the income tax return, but it is often connected to the taxpayer’s broader international tax position. The IRS instructions state that a separate Form 3520 must be filed for transactions with each foreign trust.

Form 3520 may interact with:

Form 1040
Form 3520-A
Form 8938
FinCEN Form 114 / FBAR
Form 709
Foreign trust reporting
Foreign inheritance reporting
Foreign gift reporting
Foreign grantor trust rules
Foreign pension or trust-like arrangements
Foreign estate distributions
Foreign income reporting where applicable

Form 3520 is generally due by the 15th day of the 4th month after the taxpayer’s tax year, with special rules for taxpayers living abroad and extensions tied to the income tax return extension.

Penalty-Sensitive Filing

Form 3520 can carry significant penalties if it is late, incomplete, or incorrect. IRS penalty guidance lists potential penalties for unreported foreign trust contributions, ownership, distributions, and foreign gifts, including penalties based on percentages of the unreported amounts or trust assets.

This is why Form 3520 should be handled as a serious international compliance filing, not a simple attachment.

Comparison to Related Forms

Form 3520 is different from:

Form 3520-A — annual information return for a foreign trust with a U.S. owner
Form 8938 — specified foreign financial asset reporting
FBAR / FinCEN Form 114 — foreign financial account reporting
Form 709 — U.S. gift tax return
Form 5471 — foreign corporation reporting
Form 8865 — foreign partnership reporting
Form 8621 — PFIC reporting

A taxpayer may need more than one form depending on the asset, entity, trust, account, gift, or transaction involved.