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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

The amounts on the statement must include the portion of

interest allocation according to the rules in Temporary

income reported by the foreign trust deemed attributable to the

Regulations section 1.163-8T.

U.S. owner.

Do not include interest paid on indebtedness incurred or

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

continued to purchase or carry obligations on which the interest

additional information, including applicable schedules, to ensure

is wholly exempt from income tax.

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.

Foreign Grantor Trust Beneficiary

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

and local income or real property taxes paid or incurred during

Statement

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

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

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

•

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

Federal income taxes.

•

from the foreign trust during the tax year.

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

•

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

Federal duties and excise taxes.

•

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

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

as the owner.

of the cost of the property.

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

Line 11. Amortization and depreciation (depletion). A

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

reasonable amount is allowed as a depreciation deduction for

the exhaustion, wear, and tear of:

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

•

See When and Where To File on page 1.

Property used in a trade or business or

•

Property held for the production of income.

Identification numbers and addresses. See the instructions

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

for Part I on page 2 for information on entering identification

numbers and addresses.

paid or incurred to the fiduciary for administering the trust

during the tax year.

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

Privacy and Paperwork Reduction Act Notice. We ask for

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

the information on this form to carry out the Internal Revenue

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

laws of the United States. You are required to give us the

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

information. We need it to ensure that you are complying with

organization be created or organized in the United States.

these laws and to allow us to figure and collect the right amount

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

of tax. Section 6109 requires return preparers to provide their

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

identifying numbers on the return.

attached schedule if the trust has more than one item.

You are not required to provide the information requested on

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

a form that is subject to the Paperwork Reduction Act unless

beneficiaries. Separately list the total amount of distributions

the form displays a valid OMB control number. Books or

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

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

identification number, date of distribution, and FMV (dollar

as long as their contents may become material in the

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

administration of any Internal Revenue law. Generally, tax

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

returns and return information are confidential, as required by

section 6103. However, section 6103 allows or requires the

Prepare a separate Foreign Grantor Trust Owner

Internal Revenue Service to disclose or give the information

Statement (see below) or Foreign Grantor Trust Beneficiary

shown on your tax return to others as described in the Code.

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

For example, we may disclose your tax information to the

person who receives a distribution from the trust.

Department of Justice to enforce the tax laws, both civil and

Part III—Foreign Trust Balance Sheet

criminal, and to cities, states, the District of Columbia, U.S.

commonwealths or possessions, and certain foreign

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

governments to carry out their tax laws. We may also disclose

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

this information to other countries under a tax treaty, to federal

treated as owned by a U.S. person.

and state agencies to enforce federal nontax criminal laws, or to

The balance sheet should reflect FMV. Include certificates of

federal law enforcement and intelligence agencies to combat

deposit as cash on line 1.

terrorism.

Line 18. Accumulated trust income. Include the total amount

The time needed to complete and file the form will vary

of trust income accumulated and not distributed.

depending on individual circumstances. The estimated average

Foreign Grantor Trust Owner Statement

time is:

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

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

37 hr., 18 min.

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

the foreign trust under the grantor trust rules. The statement

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

2 hr., 40 min.

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

Preparing and sending the form to the IRS

3 hr., 24 min.

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

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

If you have comments concerning the accuracy of these time

estimates or suggestions for making the form simpler, we would

Identification numbers and addresses. See the instructions

be happy to hear from you. You can write to the Internal

for Part I on page 2 for information on entering identification

Revenue Service, Tax Products Coordinating Committee,

numbers and addresses.

SE:W:CAR:MP:T:T:SP, 1111 Constitution Ave. NW, IR-6406,

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

Washington, DC 20224. Do not send the form to this office.

agent, list the documents attached to the current year Form

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

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

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

-4-

Instructions For Form 3520-A - Annual Information Return Of Foreign Trust With A U.s. Owner - 2005 Page 4

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