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assets and also from involuntary conversions (other than

Foreign Grantor Trust Owner Statement

casualty or theft).

A copy of this statement (page 3 of Form 3520-A) must be

Line 7. Other income. Enter other items of income not

furnished to each U.S. person who is treated as an owner of

included on lines 1 through 6. List the types and amounts on an

the foreign trust under the grantor trust rules. The statement

attached schedule if the trust has more than one item.

must be furnished no later than the 15th day of the 3rd month

Items to be reported on line 7 include any part of a total

following the end of the trust’s tax year or later, if an extension

distribution shown on Form 1099-R, Distributions From

of time to file is granted. See When and Where To File on

Pensions, Annuities, Retirement or Profit-Sharing Plans, IRAs,

page 1.

Insurance Contracts, etc., that is treated as ordinary income.

Identification numbers and addresses. See the instructions

For more information, see the separate instructions for

for Part I on page 2 for information on entering identification

Form 4972, Tax on Lump-Sum Distributions.

numbers and addresses.

Expenses

Line 8. Trust documents. If the trust did not appoint a U.S.

agent, list the documents attached to the current year Form

Line 9. Interest expense. Enter the amount of interest (subject

3520-A and those attached to a Form 3520-A filed within the

to limitations) paid or incurred by the trust on amounts borrowed

last 3 years. Specify the years the documents were attached.

by the trust, or on debt acquired by the trust, that is not reported

See the instructions for line 2, Part I, for a list of documents the

elsewhere in Part II.

trust is required to attach to Form 3520-A.

If the proceeds of a loan were used for more than one

Statement of Foreign Trust Income Attributable

purpose (e.g., to purchase a portfolio investment and to acquire

to U.S. Owner

an interest in a passive activity), the fiduciary must make an

interest allocation according to the rules in Temporary

The amounts on the statement must include the portion of

Regulations section 1.163-8T.

income reported by the foreign trust deemed attributable to the

U.S. owner.

Do not include interest paid on indebtedness incurred or

continued to purchase or carry obligations on which the interest

The foreign trust may need to furnish to the U.S. owner

is wholly exempt from income tax.

additional information, including applicable schedules, to ensure

that the owner accurately reports income and expenses on the

Line 10a. Foreign taxes. A foreign tax includes only a tax

owner’s U.S. income tax return.

imposed by the authority of a foreign country.

Line 10b. State and local taxes. Enter any deductible state

Foreign Grantor Trust Beneficiary

and local income or real property taxes paid or incurred during

the tax year that are not reported elsewhere in Part II.

Statement

Do not deduct on line 10b or on any other line of Part II:

A copy of this statement (page 4 of Form 3520-A) must be

•

Federal income taxes.

furnished to each U.S. beneficiary who receives a distribution

•

Estate, inheritance, legacy, succession, and gift taxes.

from the foreign trust during the tax year. The statement must

•

Federal duties and excise taxes.

be furnished to the U.S. beneficiary no later than the 15th day

•

State and local sales taxes. Instead, treat these taxes as part

of the 3rd month following the end of the trust’s tax year or later,

of the cost of the property.

if an extension of time to file is granted. See When and Where

Line 11. Amortization and depreciation (depletion). A

To File on page 1.

reasonable amount is allowed as a depreciation deduction for

Identification numbers and addresses. See the instructions

the exhaustion, wear, and tear of:

for Part I on page 2 for information on entering identification

•

Property used in a trade or business or

numbers and addresses.

•

Property held for the production of income.

Line 12. Trustee and advisor fees. Enter the deductible fees

Paperwork Reduction Act Notice. We ask for the information

paid or incurred to the fiduciary for administering the trust

on this form to carry out the Internal Revenue laws of the United

during the tax year.

States. You are required to give us the information. We need it

Line 13. Charitable contributions. Generally, any part of the

to ensure that you are complying with these laws and to allow

income reported on line 8 that is paid (or treated as paid) during

us to figure and collect the right amount of tax.

the tax year for a charitable purpose specified in section 170(c)

You are not required to provide the information requested on

is allowed as a deduction. It is not necessary that the charitable

a form that is subject to the Paperwork Reduction Act unless

organization be created or organized in the United States.

the form displays a valid OMB control number. Books or

Line 14. Other expenses. Enter other items of expense not

records relating to a form or its instructions must be retained for

listed on lines 9 through 13. List the type and amount on an

as long as their contents may become material in the

attached schedule if the trust has more than one item.

administration of any Internal Revenue law. Generally, tax

Lines 17b and 17c. Distributions to U.S. owners and

returns and return information are confidential, as required by

beneficiaries. Separately list the total amount of distributions

section 6103.

to each U.S. owner and beneficiary. List the full name,

The time needed to complete and file the form will vary

identification number, date of distribution, and FMV (dollar

depending on individual circumstances. The estimated average

amount) for each U.S. owner and beneficiary receiving a

time is:

distribution. If more space is needed, attach a schedule.

Prepare a separate Foreign Grantor Trust Owner

Recordkeeping . . . . . . . . . . . . . . . . . . . . .

37 hr., 18 min.

Statement (see below) or Foreign Grantor Trust Beneficiary

Statement (see below) for each U.S. owner or for each U.S.

Learning about the law or the form . . . . . .

2 hr., 40 min.

person who receives a distribution from the trust.

Preparing and sending the form to the IRS

3 hr., 24 min.

Part III—Foreign Trust Balance Sheet

If you have comments concerning the accuracy of these time

List all assets and liabilities of the trust, including those assets

estimates or suggestions for making the form simpler, we would

and liabilities attributable to the portion(s) of the trust (if any) not

be happy to hear from you. You can write to the Tax Forms

treated as owned by a U.S. person.

Committee, Western Area Distribution Center, Rancho

The balance sheet should reflect FMV. Include certificates of

Cordova, CA 95743 – 0001. Do not send the form to this office.

deposit as cash on line 1.

Instead, see When and Where To File on page 1.

Line 18. Accumulated trust income. Include the total amount

of trust income accumulated and not distributed.

-4-

Instructions For Form 3520-A - Annual Information Return Of Foreign Trust With A U.s. Owner - 2002 Page 4

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