Foreign Trust Taxation

FOREIGN TRUST TAX REPORTING

For U.S. grantors, owners, and beneficiaries of trusts formed outside the United States.

A trust created abroad — by you or by a family member — can bring U.S. reporting requirements with some of the highest penalties in the tax code. These rules often surprise people who never thought of themselves as having a “trust.” At Victoria Bogdanovich CPA, we help U.S. taxpayers identify their foreign trust obligations and report them correctly.

Who this is for

• U.S. persons who created or funded a trust outside the U.S.
• Beneficiaries who receive distributions from a foreign trust or estate
• People named in a foreign family trust, foundation, or similar arrangement
• New U.S. residents who set up a trust before moving

What we handle

• Form 3520 — transactions with foreign trusts and large foreign gifts or inheritances
• Form 3520-A — the annual information return for a foreign trust with a U.S. owner
• Grantor vs. non-grantor status — which determines who is taxed on the trust’s income
• Distributions — including accumulated income and the “throwback” rules that can increase tax
• Related reporting — FBAR, Form 8938, and PFICs held inside the trust

Why it matters

Penalties are large and percentage-based. A missing Form 3520 can cost the greater of $10,000 or a percentage of the amount involved; a missing 3520-A can cost the greater of $10,000 or a percentage of the trust’s assets.

Foreign structures may not be called “trusts.” Foundations, family arrangements, and some pension plans can be treated as trusts for U.S. purposes.

How it works

1. Check your fit — about 1 minute. Answer a few questions and see your starting fee.
2. Create your client portal account and complete our Client Application.
3. Meet with us — free Tax Discovery Zoom meeting. Upload your last two years of returns at least 24 hours before the meeting so we can discuss an estimated fee range on the call.
4. Receive your engagement package with your estimated fee and scope of work. Work begins once you sign.

Starting price

Foreign trust reporting starts at $3,500. The final fee depends on the trust documents and history. Your engagement package sets out your estimated fee and what it covers. Work outside that scope is billed separately.

See your starting fee

Frequently asked questions

My parents set up a trust abroad and I’m a beneficiary. Do I have to report it?
Usually only when you receive a distribution, but the rules depend on the trust. We’ll review the documents with you.

The trust is taxed in its home country. Isn’t that enough?
Not for U.S. reporting. Foreign tax may offset U.S. tax, but the forms are still required.

I didn’t file in past years. What now?
Start with a paid Initial Consultation so we can review your history before anything is filed.

Ready to see where you fit? Take the 1-minute fit check or see our pricing and how it works.