Updated October 18, 2026. Quick answer: Part II of Form 3520 is for a U.S. person who is treated as the owner of all or part of a foreign trust. It lists the owners, records where and when the trust was created, asks whether the trust filed Form 3520-A, and reports the value of the part you are treated as owning. You complete it even in a year with no transactions.
What this part is for
Page 1 of the Form 3520 return says who completes Part II, and the instructions repeat it: “Complete Part II if you are considered the owner of any assets of a foreign trust under the rules of sections 671 through 679 during the tax year.”
A quiet year does not excuse the part: “You are required to complete Part II even if there have been no transactions involving the trust during the tax year.” The same note adds that “You may also need to complete Part III if you receive a distribution from the foreign trust.” See Form 3520 Part III. Two other parts of the return are covered on Form 3520 Part I and in the Form 3520 guide.
The lines, one by one
| Line | What the form says |
|---|---|
| Page 1 box for Part II | “You are a U.S. owner of all or any portion of a foreign trust at any time during the tax year.” “Complete all applicable identifying information requested below and Part II of the form.” |
| 20 | A table with five columns headed “Name of foreign trust owner”, an address column, “Country of tax residence”, “TIN, if any” and “Relevant Code section”. |
| 21a to 21c | “Country code of country where foreign trust was created b Country code of country whose law governs the trust c Date foreign trust was created” |
| 22 | “Did the foreign trust file Form 3520-A for the current tax year?” |
| 22, if Yes | “attach the Foreign Grantor Trust Owner Statement you received from the foreign trust.” |
| 22, if No | “to the best of your ability, complete and attach a substitute Form 3520-A for the foreign trust.” “See instructions for information on penalties for failing to complete and attach a substitute Form 3520-A.” |
| 23 | “Enter the gross value of the portion of the foreign trust that you are treated as owning at the end of your tax year” |
For line 20 the instructions say “Enter information regarding any person, including yourself, who is considered the owner of any portion of the trust under the rules of sections 671 through 679.” “Also, enter in column (e) the specific Code section that causes you or any other person (as applicable) to be considered an owner for U.S. income tax purposes.”
Where the number comes from
Line 23 is the only amount in this part. The instructions say “Enter the FMV of the trust assets that you are treated as owning.” “Include all assets at FMV as of the end of the tax year.” “For this purpose, disregard all liabilities.” “The trust should send you this information in connection with its Form 3520-A.”
If it does not: “At a minimum, include the value of all assets that you have transferred to the trust.” “Use Form 8082 to notify the IRS that you did not receive a Foreign Grantor Trust Owner Statement.” The two-letter codes on lines 21a and 21b come from “code from the list at IRS.gov/CountryCodes.”
Where it goes next
Line 22 decides what you attach. The instructions say to “attach a copy of pages 3 and 4” of Form 3520-A when the trust filed one, and for No: “attach a substitute Form 3520-A that you have completed to the best of your ability.” The whole picture of the trust’s own return is on Form 3520-A. Amounts you receive from a trust you own are reported on lines 24 and 27 of Part III: “If you received an amount from a portion of a foreign trust of which you are treated as the owner, complete lines 24 and 27.” For related foreign-asset reporting, see Form 8938 and Schedule B line 7 and FinCEN Form 114, and for the return that receives your tax figures, see Form 1040.
Numbers printed for a U.S. owner
| Where | What the IRS prints |
|---|---|
| Penalty for an owner | “You may be liable for a penalty equal to the greater of $10,000 or 5% of the gross value of the portion of trust assets that you are treated as owning.” |
| Where the 5% applies | “5% of the gross value of the portion of the foreign trust’s assets treated as owned by a U.S. person under the grantor trust rules” |
| Amended Form 3520-A | “must make sure the foreign trust files an amended Form 3520-A with the IRS within 90 days” |
The first two rows are the penalty language the instructions print for a U.S. owner; the third is a time limit for an amended Form 3520-A.
Edition and line numbers
This page reads Form 3520 (Rev. December 2023) and the Instructions for Form 3520 (Rev. December 2025), which the IRS says to use with the December 2023 revision of the form; these are the current files irs.gov served on 2026-10-18. Check the edition printed on your own form and use that edition’s line numbers.
Common mistakes
- Treating a year with no transactions as a year with nothing to file. The instructions say “You are required to complete Part II even if there have been no transactions involving the trust during the tax year.”
- Answering No on line 22 and attaching nothing. The instructions say “attach a substitute Form 3520-A that you have completed to the best of your ability.”
- Subtracting the trust’s liabilities from the line 23 value. The instructions say “For this purpose, disregard all liabilities.”
Related: Form 3520, Form 8938, Schedule B line 7 and FinCEN Form 114, and Form 1040.
Sources
- Form 3520 (Rev. December 2023), Annual Return To Report Transactions With Foreign Trusts and Receipt of Certain Foreign Gifts: https://www.irs.gov/pub/irs-pdf/f3520.pdf
- Instructions for Form 3520 (Rev. December 2025): https://www.irs.gov/pub/irs-pdf/i3520.pdf
- IRS: About Form 3520: https://www.irs.gov/forms-pubs/about-form-3520
Read from the IRS documents linked above on October 18, 2026. General information, not tax advice. Your own facts decide the outcome, and a preparer, the account provider or the IRS is the right place to confirm anything consequential.