Updated October 18, 2026. Quick answer: Part I of Form 3520 is the section you complete when you transferred money or other property to a foreign trust during the tax year, or when you are the executor of a U.S. decedent’s estate with a trust connection. It asks who created the trust, whether anyone else is treated as owner, whether the transfer was a completed gift or bequest, and what was transferred. It is filed as part of the Form 3520 return, not by itself.
What this part is for
Page 1 of the Form 3520 return tells you which parts to complete. For Part I, the instructions say: “Complete Part I if you are responsible for reporting a reportable event that occurred during the current tax year”. The form’s page 1 box describes the transfer case, and this page covers that case and the executor case. The middle case in that box, which concerns obligations of a related trust, and its Schedules A and C (lines 11, 12, 14 and 19) are left to the form itself and are not walked through here.
One return covers one trust: “File a separate Form 3520 for each foreign trust.” See the Form 3520 guide for the whole return and Form 3520 for a foreign inheritance if your question started with a foreign inheritance.
The lines, one by one
| Line | What the form says |
|---|---|
| Page 1 box for Part I | “You are (a) a U.S. transferor who, directly or indirectly, transferred money or other property during the current tax year to a foreign trust;” the box also names “the executor of the estate of a U.S. decedent and (1) the decedent made a transfer to a foreign trust by reason of death”, and ends: “Complete all applicable identifying information requested below and Part I of the form.” |
| 3 | “Did the foreign trust appoint a U.S. agent (defined in the instructions) who can provide the IRS with all relevant trust information?” “complete lines 3a through 3g.” |
| 4f (decedent boxes) | “U.S. decedent made transfer to a foreign trust by reason of death.” |
| 5a to 5c | “Name of trust creator b Address c TIN, if any” |
| 6a to 6c | “Country code of country where trust was created b Country code of country whose law governs the trust c Date trust was created” |
| 7a | “Will any person (other than the foreign trust) be treated as the owner of the transferred assets after the transfer?” |
| 7b | A table with five columns headed “Name of foreign trust owner”, an address column, “Country of residence”, “TIN, if any” and “Relevant Code section”. |
| 8 | “Was the transfer a completed gift or bequest?” |
| 9a | “Now or at any time in the future, can any part of the income or corpus of the trust benefit any U.S. beneficiary?” |
| 9b | “could the trust be revised or amended to benefit a U.S. beneficiary?” |
| 10 | “Reserved for future use” |
| 13 (Schedule B) | “During the current tax year, did you make any transfers (directly or indirectly) to the trust and receive less than FMV, or no consideration at all, for the property transferred?” |
| 13, columns (a) to (i) | Captions only: “Date of transfer”; “Description of property transferred”; “FMV of property transferred”; “U.S. adjusted basis of property transferred”; “Gain recognized at time of transfer, if any”; “Description of property received, if any”; “FMV of property received” |
| 15 | “Name of beneficiary”, “Address of beneficiary”, “U.S. beneficiary?” and “TIN, if any” |
| 16 | “Name of trustee”, “Address of trustee” and “TIN, if any” |
| 17 | “Name of other person with trust powers”, “Address of other person with trust powers”, “Description of powers” and “TIN, if any” |
| 18 | “Trust instrument”; “Memoranda or letters of wishes”; “Trust financial statements”; “Organizational chart and other trust documents” |
For lines 15 to 18 the form adds a condition: “acknowledging that the foreign trust did not appoint a U.S. agent who can provide the IRS with all relevant trust information, complete lines 15 through 18.”
Where the number comes from
Most of Part I is names, dates and yes or no answers, so there is little to total. For the Schedule B amounts, the instructions say “Enter the U.S. adjusted basis of the property transferred.” and “Only include gain that is immediately recognized at the time of the transfer.” They also allow “You may aggregate transfers of cash during the year on a single line of line 13.” If the space runs short: “attach a statement.”
Line 15 asks for “Enter the name, address, whether the person is a U.S. beneficiary (defined earlier), and TIN, if any, of all reportable beneficiaries.” Line 17 asks for “Enter the name, address, and TIN, if any, of any person, other than those listed on line 16, that has significant powers over the trust”.
Where it goes next
The Part I answers travel with the rest of the return. The instructions link line 8 to other filings: “If the transfer was a completed gift (see Regulations section 25.2511-2), you may have to file Form 709”. See Form 709 for that form. On line 7, “if you are treated as a U.S. owner of any portion of the foreign trust under the grantor trust rules (sections 671 through 679).” The instruction goes on: “You must also complete line 7b and Part II of this form.” Part II is covered on Form 3520 Part II.
Gain on a transfer is not reported on Form 3520 itself: “Although the gain is not recognized on Form 3520, it must be reported on the appropriate form or schedule of the transferor’s income tax return.” For where that return goes, see Form 1040 and Form 1040 line by line. Page 1 also has a box that begins “Check if any excepted specified foreign financial assets are reported on this form.” That ties to Form 8938. Distributions the trust makes to you are Part III, on Form 3520 Part III.
Numbers printed for a missed Part I report
| Where | What the IRS prints |
|---|---|
| Penalty floor | “initial penalty is equal to the greater of $10,000 or the following” |
| Failure to report a transfer | “35% of the gross value of any property transferred to a foreign trust for failure by a U.S. transferor to report the creation of or transfer to a foreign trust in Part I.” |
| Continued noncompliance | “Additional penalties will be imposed if the noncompliance continues for more than 90 days after the IRS mails a notice of failure to comply with the required reporting.” |
| Documents attached in earlier years | “Note: If these documents have been previously attached to a Form 3520-A or Form 3520 filed within the previous 3 years, attach only relevant updates.” |
These are the figures the instructions print about Part I reporting. The page does not compute a penalty for anyone.
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
- Filing one return for several trusts. The form says “File a separate Form 3520 for each foreign trust.”
- Skipping lines 15 to 18 when line 3 is answered No. The instructions say “acknowledging that the foreign trust did not appoint a U.S. agent who can provide the IRS with all relevant trust information, complete lines 15 through 18.”
- Folding different transfers into one answer. The instructions say “complete a separate line for each transfer on duplicate copies of the relevant pages of the form.”
Related: Form 3520, Form 3520 for a foreign inheritance, Form 709, Form 8938, 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.