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A member of your family — your brothers and sisters,

U.S. Beneficiary

half-brothers and half-sisters, spouse, ancestors (parents,

A U.S. beneficiary generally includes any U.S. person that

grandparents, etc.), lineal descendants (children,

could possibly benefit (directly or indirectly) from the trust

grandchildren, etc.), and the spouses of any of these

(including an amended trust) at any time, whether or not the

persons.

person is named in the trust instrument as a beneficiary and

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A corporation in which you, directly or indirectly, own

whether or not the person can receive a distribution from the

more than 50% in value of the outstanding stock.

trust in the current year. In addition, a U.S. beneficiary

See section 643(i)(2)(B) and the regulations under

includes:

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sections 267 and 707(b).

A foreign corporation that is a controlled foreign

corporation (as defined in section 957(a)),

Person related to a foreign trust. A person is related to a

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A foreign partnership if a U.S. person is a partner of the

foreign trust if such person, without regard to the transfer at

partnership, and

issue, is a grantor of the trust, a beneficiary of the trust, or is

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A foreign estate or trust if the estate or trust has a U.S.

related to any grantor or beneficiary of the trust. See the

beneficiary.

definition of related person on page 3.

A foreign trust will be treated as having a U.S. beneficiary

Reportable Event

unless the terms of the trust instrument specifically prohibit

A reportable event includes:

any distribution of income or corpus to a U.S. person at any

1. The creation of a foreign trust by a U.S. person.

time, even after the death of the U.S. transferor, and the

2. The transfer of any money or property, directly or

trust cannot be amended or revised to allow such a

indirectly, to a foreign trust by a U.S. person, including a

distribution.

transfer by reason of death. This includes transfers that are

deemed to have occurred under sections 679(a)(4) and (5).

U.S. Person

3. The death of a citizen or resident of the United States

A U.S. person is:

if:

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A citizen or resident alien of the United States (see Pub.

The decedent was treated as the owner of any portion

519, U.S. Tax Guide for Aliens, for guidance on determining

of a foreign trust under the grantor trust rules or

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resident alien status),

Any portion of a foreign trust was included in the gross

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estate of the decedent.

A domestic partnership,

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A domestic corporation,

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Responsible Party

Any estate (other than a foreign estate, within the

meaning of section 7701(a)(31)(A)), and

Responsible party means:

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Any domestic trust (defined on page 2).

The grantor in the case of the creation of an inter vivos

trust,

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U.S. Transferor

The transferor, in the case of a reportable event (defined

above) other than a transfer by reason of death, or

A U.S. transferor is any U.S. person who:

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The executor of the decedent’s estate in any other case

1. Creates or settles a foreign trust.

(whether or not the executor is a U.S. person).

2. Directly or indirectly transfers money or property to a

foreign trust. This includes a U.S. citizen or resident who

U.S. Agent

has made a deemed transfer under section 679(a)(4) or a

A U.S. agent is a U.S. person (defined below) that has a

U.S. resident who has made a deemed transfer under

binding contract with a foreign trust that allows the U.S.

section 679(a)(5).

person to act as the trust’s authorized U.S. agent in applying

3. Makes a sale to a foreign trust if the sale was at other

sections 7602, 7603, and 7604 with respect to:

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than arm’s-length terms or was to a related foreign trust, or

Any request by the IRS to examine records or produce

makes (or guarantees) a loan to a related foreign trust.

testimony related to the proper U.S. tax treatment of

4. Is the executor of the estate of a U.S. person and:

amounts distributed, or required to be taken into account

a. The decedent made a testamentary transfer (a

under the grantor trust rules, with respect to a foreign trust;

transfer by reason of death) to a foreign trust,

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Any summons by the IRS for such records or testimony.

b. Immediately prior to death, the decedent was treated

as the owner of any portion of a foreign trust under the

A U.S. grantor, a U.S. beneficiary, or a domestic

grantor trust rules, or

corporation controlled by the grantor or beneficiary may act

c. Any portion of a foreign trust’s assets were included in

as a U.S. agent. However, you may not treat the foreign

the estate of the decedent.

trust as having a U.S. agent unless you enter the name,

address, and taxpayer identification number of the U.S.

agent on lines 3a through 3g. See Identification numbers on

Generally, the person defined as the transferor is the

page 5.

responsible party (defined above) who must ensure that

required information be provided or pay appropriate

If the person identified as the U.S. agent does not

penalties.

produce records or testimony when requested or summoned

by the IRS, the IRS may redetermine the tax consequences

of your transactions with the trust and impose appropriate

penalties under section 6677.

Specific Instructions

The agency relationship must be established by the time

the U.S. person files Form 3520 for the relevant tax year

Period Covered

and must continue as long as the statute of limitations

remains open for the relevant tax year. If the agent resigns

File the 2008 return for calendar year 2008 and fiscal years

that begin in 2008 and end in 2009. For a fiscal year, fill in

or liquidates, or its responsibility as an agent of the trust is

terminated, see Section IV(B) of Notice 97-34.

the tax year space at the top of the form.

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Instructions For Form 3520 - Annual Return To Report Transactions With Foreign Trusts And Receipt Of Certain Foreign Gifts - 2008 Page 4

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