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Line 6. Ordinary gains (losses). Enter the ordinary gain or

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

(loss) from the sale or exchange of property other than capital

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

assets and also from involuntary conversions (other than

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

casualty or theft).

page 1.

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

Identification numbers and addresses. See the instructions

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

for Part I on page 2 for information on entering identification

attached schedule if the trust has more than one item.

numbers and addresses.

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

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

agent, list the documents attached to the current year Form

distribution shown on Form 1099-R, Distributions From

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

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

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

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

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

For more information, see the separate instructions for

Form 4972, Tax on Lump-Sum Distributions.

trust is required to attach to Form 3520-A.

Expenses

Statement of Foreign Trust Income Attributable

to U.S. Owner

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

The amounts on the statement must include the portion of

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

income reported by the foreign trust deemed attributable to the

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

U.S. owner.

elsewhere in Part II.

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

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

additional information, including applicable schedules, to ensure

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

that the owner accurately reports income and expenses on the

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

owner’s U.S. income tax return.

interest allocation according to the rules in Temporary

Regulations section 1.163-8T.

Foreign Grantor Trust Beneficiary

Do not include interest paid on indebtedness incurred or

Statement

continued to purchase or carry obligations on which the interest

is wholly exempt from income tax.

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

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

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

imposed by the authority of a foreign country.

from the foreign trust during the tax year.

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

Exception. Do not complete this statement for a U.S. person

and local income or real property taxes paid or incurred during

for any portion of the trust of which that U.S. person is treated

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

as the owner.

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

The statement must be furnished to the U.S. beneficiary no

•

Federal income taxes.

later than the 15th day of the 3rd month following the end of the

•

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

trust’s tax year or later, if an extension of time to file is granted.

•

Federal duties and excise taxes.

See When and Where To File on page 1.

•

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

Identification numbers and addresses. See the instructions

of the cost of the property.

for Part I on page 2 for information on entering identification

Line 11. Amortization and depreciation (depletion). A

numbers and addresses.

reasonable amount is allowed as a depreciation deduction for

the exhaustion, wear, and tear of:

•

Paperwork Reduction Act Notice. We ask for the information

Property used in a trade or business or

•

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

Property held for the production of income.

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

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

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

paid or incurred to the fiduciary for administering the trust

us to figure and collect the right amount of tax.

during the tax year.

You are not required to provide the information requested on

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

a form that is subject to the Paperwork Reduction Act unless

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

the form displays a valid OMB control number. Books or

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

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

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

as long as their contents may become material in the

organization be created or organized in the United States.

administration of any Internal Revenue law. Generally, tax

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

returns and return information are confidential, as required by

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

section 6103.

attached schedule if the trust has more than one item.

The time needed to complete and file the form will vary

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

depending on individual circumstances. The estimated average

beneficiaries. Separately list the total amount of distributions

time is:

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

identification number, date of distribution, and FMV (dollar

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

37 hr., 18 min.

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

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

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

2 hr., 40 min.

Prepare a separate Foreign Grantor Trust Owner

Preparing and sending the form to the IRS

3 hr., 24 min.

Statement (see below) or Foreign Grantor Trust Beneficiary

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

If you have comments concerning the accuracy of these time

person who receives a distribution from the trust.

estimates or suggestions for making the form simpler, we would

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

Part III—Foreign Trust Balance Sheet

Coordinating Committee, Western Area Distribution Center,

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

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

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

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

treated as owned by a U.S. person.

The balance sheet should reflect FMV. Include certificates of

deposit as cash on line 1.

Line 18. Accumulated trust income. Include the total amount

of trust income accumulated and not distributed.

Foreign Grantor Trust Owner Statement

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

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

the foreign trust under the grantor trust rules. The statement

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Instructions For Form 3520-A - Annual Information Return Of Foreign Trust With A U.s. Owner - 2003 Page 4

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