Instructions for Form 3520 |
2006 Tax Year |
This is archived information that pertains only to the 2006 Tax Year. If you are looking for information for the current tax year, go to the Tax Prep Help Area.
File the 2006 return for calendar year 2006 and fiscal years that begin in 2006 and end in 2007. For a fiscal year, fill in
the tax year space at
the top of the form.
Item A—Initial Return, Final Return, Amended Return
Initial return.
If this is the first return you are filing concerning the foreign trust identified, check the “ Initial return” box.
Final return.
If no further returns for transactions with the foreign trust are required, check the “ Final return” box.
Example.
If you annually filed Part II, Form 3520, because you were the owner of the trust for U.S. income tax purposes and the trust
has terminated within
the tax year, that year's return would be a final return with respect to that foreign trust.
Amended return.
If this Form 3520 is filed to amend a Form 3520 that you previously filed, check the “ Amended return” box.
Service Center.
Generally, enter the name of the Service Center where you file your income tax return. However, if you are an executor
filing a Form 3520 with
respect to a U.S. decedent, provide both the name of the Service Center where the decedent's final income tax return will
be filed, and the name of
the Service Center where the estate tax return will be filed. Please enter the information as follows. First enter the name
of the Service Center
where the decedent's final income tax return will be filed. Then enter the name of the Service Center where the estate tax
return will be filed,
followed by “ (estate tax return).”
Identification numbers.
Use social security numbers or individual taxpayer identification numbers to identify individuals. Use employer identification
numbers to identify
estates, trusts, partnerships, and corporations.
Do not enter a preparer tax identification number (PTIN) in any entry space on Form 3520 other than the entry space for “ Preparer's SSN or
PTIN” at the bottom of page 1 of the form.
Address.
Include the suite, room, or other unit number after the street address. If the post office does not deliver mail
to the street address and the
U.S. person has a P.O. box, show the box number instead.
Foreign address.
Do not abbreviate the country name.
Line 1.
This line identifies the person that is filing Form 3520. If you and your spouse are both making transfers to the
same trust and you file joint
returns, you may file only one Form 3520. Put the names and taxpayer identification numbers in the same order as they appear
on your Form 1040.
Line 4.
If you are the executor of the estate of a U.S. citizen or resident, you must provide information about the decedent
on lines 4a through 4e. You
must also check the applicable box on line 4f to indicate which of the following applies: the U.S. decedent made a transfer
to a foreign trust by
reason of death, the U.S. decedent was treated as the owner of a portion of a foreign trust immediately prior to death, or
the estate of the U.S.
decedent included assets of a foreign trust.
Part I—Transfers by U.S. Persons to a Foreign Trust During the Current Tax Year
Complete Part I for information on a reportable event (defined on page 4).
Note.
Although the basic reporting requirements for Form 3520 are contained in section 6048 (and are clarified by Notice 97-34),
the reporting
requirements have been clarified by the regulations under sections 679 and 684. Accordingly, the regulations under sections
679 and 684 should be
referred to for additional clarification for transfers that are required to be reported in Part I of Form 3520.
Line 5.
If you are not the trust creator, enter the name of the person that created or originally settled the foreign trust.
Line 6.
See the list of country codes on pages 11, 12, and 13. If the country is not included in the list, enter “ OC” for “ other country” and
enter the country's name.
Lines 7, 8, and 10.
If you are reporting multiple transfers to a single foreign trust and the answers to lines 7, 8, or 10 are different
for various transfers,
complete a separate line for each transfer on duplicate copies of the relevant pages of the form.
Line 7a.
If “ Yes,” you must comply with the reporting requirements that would apply to a direct transfer to that other person. For example,
if that
other person is a foreign partnership, you must comply with the reporting requirements for transfers to foreign partnerships
(see Form 8865, Return of
U.S. Persons With Respect to Certain Foreign Partnerships).
Line 8.
If the transfer was a completed gift (see Regulations section 25.2511-2) or bequest, you may have to file Form 706,
United States Estate (and
Generation-Skipping Transfer) Tax Return, or Form 709, United States Gift (and Generation-Skipping Transfer) Tax Return.
Line 9.
See definition of U.S. beneficiary on page 4.
Line 10.
If you are treated as the owner of any portion of the foreign trust under the grantor trust rules, answer “ Yes” to this question and complete
Part II.
Schedule A—Obligations of a Related Trust
Line 11a.
The FMV of an obligation of the trust (or an obligation of another person related to the trust) that you receive in
exchange for the transferred
property equals zero, unless the obligation meets the requirements of a qualified obligation. See page 3 for the definitions
of obligation and
qualified obligation. See page 4 for the definition of person related to a foreign trust.
Lines 12 and 26.
If you answered “ Yes” to the question on line 11b (line 25, column (e)) with respect to any obligation, you generally must answer “ Yes”
to the question on line 12 (line 26). By so doing, you agree to extend the period of assessment of any income or transfer
tax attributable to the
transfer and any consequential income tax changes for each year that the obligation is outstanding. This form will be deemed
to be agreed upon and
executed by the IRS for purposes of Regulations section 301.6501(c)-1(d).
If you answer “ No” to the question on line 12 (line 26), you generally may not treat an obligation as a qualified obligation on line 11b (line
25, column (e)). The one exception to this is if the maturity date of the obligation does not extend beyond the end of your
tax year for which you are
reporting and such obligation is paid within that tax year.
Schedule B—Gratuitous Transfers
Complete the applicable portions of Schedule B with respect to all reportable events (defined on page 4) that took place during
the current tax
year.
Line 13
-
In your description, indicate whether the property is tangible or intangible.
-
You may aggregate transfers of cash during the year on a single line of line 13.
-
If there is not enough space on the form, please attach a statement.
-
For transfers reported on attachments, you must enter “Attachment” on one of the lines in column (b), and enter the total amount of
transfers reported on the attachment on line 13, columns (c), (d), (e), (f), (h), and (i).
Note.
Penalties may be imposed for failure to report all required information. See Penalties on page 2.
Line 13, column (e).
Only include gain that is immediately recognized at the time of the transfer.
Note.
For any transfer by a U.S. person to a foreign nongrantor trust after August 4, 1997, the transfer is treated as a sale or
exchange and the
transferor must recognize as a gain the excess of the FMV of the transferred property over its adjusted basis. 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. See section 684.
Line 13, column (f).
Generally, if the reported transaction is a sale, you should report the gain on the appropriate form or schedule
of your income tax return.
Line 15.
Enter the name, address, whether the person is a U.S. beneficiary (defined on page 4), and taxpayer identification
number, if any, of all
reportable beneficiaries. Include specified beneficiaries, classes of discretionary beneficiaries, and names or classes of
any beneficiaries that
could be named as additional beneficiaries. If there is not enough space on the form, please attach a statement.
Line 17.
Enter the name, address, and taxpayer identification number (if any) of any person, other than those listed on line
16, that has significant powers
over the trust (e.g., “ protectors,” “ enforcers,” any person that must approve trustee decisions or otherwise direct trustees, any person
with a power of appointment, any person with powers to remove or appoint trustees, etc.). Include a description of each person's
powers. If there is
not enough space, attach a statement.
Line 18.
If you checked “ No” on line 3 (or you did not complete lines 3a through 3g) attach:
-
A summary of the terms of the trust that includes a summary of any oral agreements or understandings you have with the trustee,
whether or
not legally enforceable.
-
A copy of all trust documents (and any revisions), including the trust instrument, any memoranda of wishes prepared by the
trustees
summarizing the settlor's wishes, any letter of wishes prepared by the settlor summarizing his or her wishes, and any similar
documents.
-
A copy of the trust's financial statements, including a balance sheet and an income statement similar to those shown on Form
3520-A. These
financial statements must reasonably reflect the trust's accumulated income under U.S. income tax principles. For example,
the statements must not
treat capital gains as additions to trust corpus.
Schedule C—Qualified Obligations Outstanding in the Current Tax Year
Line 19.
Provide information on the status of outstanding obligations of the foreign trust (or person related to the foreign
trust) that you reported as a
qualified obligation in the current tax year. This information is required in order to retain the obligation's status as a
qualified obligation. If
relevant, attach a statement describing any changes in the terms of the qualified obligation.
If the obligation fails to retain the status of a qualified obligation, you will be treated as having made a gratuitous
transfer to the foreign
trust, which must be reported on Schedule B, Part I. See Section III(C)(2) of Notice 97-34.
Part II—U.S. Owner of a Foreign Trust
Complete Part II if you are considered the owner of any assets of a foreign trust under the grantor trust rules during the
tax year. You are
required to enter a taxpayer identification number for such foreign trust on line 2b.
Line 20.
Enter information regarding any person other than yourself who is considered the owner of any portion of the trust
under the grantor trust rules.
Also, enter in column (e) the specific Code section that causes that person to be considered an owner for U.S. income tax
purposes. See the grantor
trust rules under sections 671 through 679.
Line 21.
See the list of country codes on pages 11, 12, and 13. If the country is not included in the list, enter “ OC” for “ other country” and the
country's name.
Line 22.
If “ Yes,” the copy of the Foreign Grantor Trust Owner Statement (page 3 of Form 3520-A) should show the amount of the foreign trust's
income
that is attributable to you for U.S. income tax purposes. See Section IV of Notice 97-34.
If “ No,” you may be liable for a penalty of 5% of the trust assets that you are treated as owning, plus additional penalties for
continuing
failure to file after notice by the IRS. See section 6677. Also see Penalties on page 2.
Line 23.
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 you did not receive
such information
(line 9 of the Foreign Grantor Trust Owner Statement) from the trust, complete line 23 to the best of your ability. At a minimum,
include the value of
all assets that you have transferred to the trust. Also use Form 8082 to notify the IRS that you did not receive a Foreign
Grantor Trust Owner
Statement. However, filing Form 8082 does not relieve you of any penalties that may be imposed under section 6677. See Penalties on page 2.
Part III—Distributions to a U.S. Person From a Foreign Trust During the Current Tax Year
If you received an amount from a portion of a foreign trust of which you are treated as the owner and you have correctly reported
any information
required on Part II and the trust has filed a Form 3520-A with the IRS, do not separately disclose distributions again in
Part III. If you received an
amount from a foreign trust that would require a report under both Parts III and IV (gifts and bequests) of Form 3520, report
the amount only in Part
III.
Line 24.
Report any cash or other property that you received (actually or constructively, directly or indirectly) during the
current tax year, from a
foreign trust, whether or not taxable, unless the amount is a loan to you from the trust that must be reported on line 25.
For example, if you are a
partner in a partnership that receives a distribution from a foreign trust, you must report your allocable share of such payment
as an indirect
distribution from the trust.
Line 24, column (c).
The filer is permitted to enter the basis of the property in the hands of the beneficiary (as determined under section
643(e)(1)), if lower than
the FMV of the property, but only if the taxpayer is not required to complete Schedule A (lines 31 through 38) due to lack
of documentation. For these
purposes, lack of documentation refers to a situation in which the filer checked “ No” on line 29 or 30 because (a) the beneficiary did not
receive a Foreign Grantor Trust Beneficiary Statement or a Foreign Nongrantor Trust Beneficiary Statement from the trust or
(b) such statement did not
contain all six of the items specified under the instructions for line 29 or line 30 on page 7.
Line 25.
If you, or a person related to you, received a loan from a related foreign trust, it will be treated as a distribution
to you unless the obligation
you issued in exchange is a qualified obligation.
For this purpose, a loan to you by an unrelated third party that is guaranteed by a foreign trust is generally treated
as a loan from the trust.
Line 25, column (e).
Answer “ Yes” if your obligation given in exchange for the loan is a qualified obligation (defined on page 3).
Line 26.
See Lines 12 and 26 on page 5.
Line 27.
Penalties may be imposed for failure to accurately report all distributions received during the current tax year.
See Penalties on page
2.
Line 28.
Provide information on the status of any outstanding obligation to the foreign trust that you reported as a qualified
obligation in the current tax
year. This information is required in order to retain the obligation's status as a qualified obligation. If relevant, attach
a statement describing
any changes to the terms of the qualified obligation. If the obligation fails to retain the status of a qualified obligation,
you will be treated as
having received a distribution from the foreign trust, which must be reported as such on line 25. See Section V(A) of Notice
97-34.
Lines 29 and 30.
If any of the six items required for the Foreign Grantor Trust Beneficiary Statement (see Line 29 below) or for the Foreign Nongrantor
Trust Beneficiary Statement (see Line 30 below) is missing, you must check “ No” on line 29 or line 30, as applicable.
Also, if you answer “ Yes” to line 29 or line 30, and the foreign trust or U.S. agent does not produce records or testimony when requested or
summoned by the IRS, the IRS may redetermine the tax consequences of your transactions with the trust and impose appropriate
penalties under section
6677.
Line 29.
If “ Yes,” attach the Foreign Grantor Trust Beneficiary Statement (page 4 of Form 3520-A) from the foreign trust and do not complete
the rest
of Part III with respect to the distribution. If a U.S. beneficiary receives a complete Foreign Grantor Trust Beneficiary
Statement with respect to a
distribution during the tax year, the beneficiary should treat the distribution for income tax purposes as if it came directly
from the owner. For
example, if the distribution is a gift, the beneficiary should not include the distribution in gross income.
In addition to basic identifying information (i.e., name, address, TIN, etc.) about the foreign trust and its trustee,
this statement must contain
these items:
-
The first and last day of the tax year of the foreign trust to which this statement applies.
-
An explanation of the facts necessary to establish that the foreign trust should be treated for U.S. tax purposes as owned
by another
person. (The explanation should identify the Code section that treats the trust as owned by another person.)
-
A statement identifying whether the owner of the trust is an individual, corporation, or partnership.
-
A description of property (including cash) distributed or deemed distributed to the U.S. person during the tax year, and the
FMV of the
property distributed.
-
A statement that the trust will permit either the IRS or the U.S. beneficiary to inspect and copy the trust's permanent books
of account,
records, and such other documents that are necessary to establish that the trust should be treated for U.S. tax purposes as
owned by another person.
This statement is not necessary if the trust has appointed a U.S. agent.
-
A statement as to whether the foreign trust has appointed a U.S. agent (defined on page 4). If the trust has a U.S. agent,
include the name,
address, and taxpayer identification number of the agent.
Line 30.
If “ Yes,” attach the Foreign Nongrantor Trust Beneficiary Statement from the foreign trust. A Foreign Nongrantor Trust Beneficiary
Statement
must include the following items:
-
An explanation of the appropriate U.S. tax treatment of any distribution or deemed distribution for U.S. tax purposes, or
sufficient
information to enable the U.S. beneficiary to establish the appropriate treatment of any distribution or deemed distribution
for U.S. tax
purposes.
-
A statement identifying whether any grantor of the trust is a partnership or a foreign corporation. If so, attach an explanation
of the
relevant facts.
-
A statement that the trust will permit either the IRS or the U.S. beneficiary to inspect and copy the trust's permanent books
of account,
records, and such other documents that are necessary to establish the appropriate treatment of any distribution or deemed
distribution for U.S. tax
purposes. This statement is not necessary if the trust has appointed a U.S. agent.
-
The Foreign Nongrantor Trust Beneficiary Statement must also include items 1, 4, and 6, as listed for line 29 above as well
as basic
identifying information (e.g., name, address, TIN, etc.) about the foreign trust and its trustee.
Schedule A—Default Calculation of Trust Distributions
If you answered “Yes” to line 30, you may complete either Schedule A or Schedule B. Generally, however, if you complete Schedule A in the
current year (or did so in the prior years), you must continue to complete Schedule A for all future years, even if you are
able to answer “Yes”
to line 30 in that future year. (The only exception to this consistency rule is that you may use Schedule B in the year that
a trust terminates, but
only if you are able to answer “Yes” to line 30 in the year of termination.)
Line 32.
To the best of your knowledge, state the number of years the trust has been in existence as a foreign trust and attach
an explanation of your basis
for this statement. Consider any portion of a year to be a complete year. If this is the first year that the trust has been
a foreign trust, do not
complete the rest of Part III (you do not have an accumulation distribution).
Line 33.
Enter the total amount of distributions that you received during the 3 preceding tax years (or the number of years
the trust has been a foreign
trust, if less than 3). For example, if a trust distributed $50 in year 1, $120 in year 2, and $150 in year 3, the amount
reported on line 33 would be
$320 ($50 + $120 + $150).
Line 35.
Divide line 34 by 3 (or the number of years the trust has been a foreign trust if fewer than 3). Consider any portion
of a year to be a complete
year. For example, a foreign trust created on July 1, 2004, would be treated on a 2006 calendar year return as having 2 preceding
years (2004 and
2005). In this case, you would calculate the amount on line 35 by dividing line 34 by 2. Do not disregard tax years in which
no distributions were
made. The IRS will consider your proof of these prior distributions as adequate records to demonstrate that any distribution
up to the amount on line
31 is not an accumulation distribution in the current tax year.
Line 36.
Enter this amount as ordinary income on your tax return. Report this amount on the appropriate schedule of your tax
return (e.g., Schedule E (Form
1040), Part III).
Note.
If there is an amount on line 37, you must also complete line 38 and Schedule C — Calculation of Interest Charge, to determine the
amount of any interest charge you may owe.
Schedule B—Actual Calculation of Trust Distributions
You may only use Schedule B if:
-
You answered “Yes” to line 30,
-
You attach a copy of the Foreign Nongrantor Trust Beneficiary Statement to this return, and
-
You have never before used Schedule A for this foreign trust or this foreign trust terminated during the tax year.
Line 40.
Enter the amount received by you from the foreign trust that is treated as ordinary income of the trust in the current
tax year. Ordinary income is
all income that is not capital gains. Report this amount on the appropriate schedule of your tax return (e.g., Schedule E
(Form 1040), Part III).
Line 42.
Enter the amount received by you from the foreign trust that is treated as capital gain income of that trust in the
current tax year. Report this
amount on the appropriate schedule of your tax return (e.g., Schedule D (Form 1040)).
Line 45.
Enter the foreign trust's aggregate undistributed net income (UNI). For example, assume that a trust was created in
2000 and has made no
distributions prior to 2006. Assume the trust's ordinary income was $0 in 2005, $60 in 2004, $124 in 2003, $87 in 2002, $54
in 2001, and $25 in 2000.
Thus, for 2006, the trust's UNI would be $350. If the trust earned $100 and distributed $200 during 2006 (so that $100 was
distributed from
accumulated earnings), the trust's 2007 aggregate UNI would be $250 ($350 + $100 - $200).
Line 46.
Enter the foreign trust's weighted undistributed net income (weighted UNI). The trust's weighted UNI is its accumulated
income that has not been
distributed, weighted by the years that it has accumulated income. To calculate weighted UNI, multiply the undistributed income
from each of the
trust's years by the number of years since that year, and then add each year's result. Using the example from line 45, the
trust's weighted UNI in
2006 would be $1,260, calculated as follows:
Year |
No. of years
since that year |
UNI from
each year |
Weighted UNI |
2005
|
1
|
$0
|
$0
|
|
2004
|
2
|
60
|
120
|
|
2003
|
3
|
124
|
372
|
|
2002
|
4
|
87
|
348
|
|
2001
|
5
|
54
|
270
|
|
2000
|
6
|
25
|
150
|
|
TOTAL
|
|
$350
|
$1,260
|
|
To calculate the trust's weighted UNI for the following year (2007), the trust could update this calculation, or the
weighted UNI shown on line 46
of the 2006 Form 3520 could simply be updated using the following steps:
-
Begin with the 2006 weighted UNI.
-
Add UNI at the beginning of 2006.
-
Add trust earnings in 2006.
-
Subtract trust distributions in 2006.
-
Subtract weighted trust accumulation distributions in 2006. (Weighted trust accumulation distributions are the trust accumulation
distributions in 2006 multiplied by the applicable number of years from 2006.)
Using the examples above, the trust's 2007 weighted UNI would be $1,150, calculated as follows.
2006 weighted UNI
|
$1,260
|
|
UNI at beginning of 2006
|
+ 350
|
|
Trust earnings in 2006
|
+ 100
|
|
Trust distributions in 2006
|
- 200
|
|
Weighted trust accumulation distributions in 2006
($100 X 3.6)
|
-360 |
|
2007 weighted UNI
|
$1,150
|
|
Line 47.
Calculate the trust's applicable number of years by dividing line 46 by line 45. Using the examples in the instructions
for lines 45 and 46, the
trust's applicable number of years would be 3.6 in 2006 (1,260/350) and 4.6 in 2007 (1,150/250).
Note.
Include as many decimal places as there are digits in the UNI on line 45 (e.g., using the example in the instructions for
line 45, include three
decimal places).
Schedule C—Calculation of Interest Charge
Complete Schedule C if you entered an amount on line 37 or line 41.
Line 49.
Include the amount from line 48 of this form on line 1, Form 4970. Then compute the tax on the total accumulation
distribution using lines 1
through 28 of Form 4970. Enter on line 49 the tax from line 28 of Form 4970, Tax on Accumulation Distribution of Trusts.
Note.
Use Form 4970 as a worksheet and attach it to Form 3520.
Line 51.
Interest accumulates on the tax (line 49) for the period beginning on the date that is the applicable number of years
(as rounded on line 50) prior
to the applicable date and ending on the applicable date. For purposes of making this interest calculation, the applicable
date is the date that is
mid-year through the tax year for which reporting is made (e.g., in the case of a 2006 calendar year taxpayer, the applicable
date would be June 30,
2006). Alternatively, if you received only a single distribution during the tax year that is treated as an accumulation distribution,
you may use the
date of that distribution as the applicable date.
For portions of the interest accumulation period that are prior to 1996 (and after 1976), interest accumulates at
a simple rate of 6% annually,
without compounding. For portions of the interest accumulation period that are after 1995, interest is compounded daily at
the rate imposed on
underpayments of tax under section 6621(a)(2). This compounded interest for periods after 1995 is imposed not only on the
tax, but also on the total
simple interest attributable to pre-1996 periods.
If you are a 2006 calendar year taxpayer and you use June 30, 2006, as the applicable date for calculating interest,
use the table below and on
page 9 to determine the combined interest rate and enter it on line 51. If you are not a 2006 calendar year taxpayer or you
choose to use the actual
date of the distribution as the applicable date, calculate the combined interest rate using the above principles and enter
it on line 51.
Table of Combined Interest Rate Imposed on the Total Accumulation Distribution
Look up the applicable number of years of the foreign trust that you entered on line 50. Read across to find
the combined interest rate to enter on line 51. Use this table only if you are a 2006 calendar year taxpayer and are using
June 30, 2006, as the
applicable date.
|
|
|
|
|
Applicable number
|
Combined
|
|
of years of trust
|
interest rate
|
|
(from line 50)
|
(enter on line 51)
|
|
1.0
|
0.0698
|
|
1.5
|
0.0994
|
|
2.0
|
0.1245
|
|
2.5
|
0.1500
|
|
3.0
|
0.1764
|
|
3.5
|
0.2059
|
|
4.0
|
0.2429
|
|
4.5
|
0.2805
|
|
5.0
|
0.3265
|
|
5.5
|
0.3835
|
|
6.0
|
0.4476
|
|
6.5
|
0.5101
|
|
7.0
|
0.5722
|
|
7.5
|
0.6318
|
|
8.0
|
0.6989
|
|
8.5
|
0.7721
|
|
9.0
|
0.8543
|
|
9.5
|
0.9389
|
|
10.0
|
1.0286
|
|
10.5
|
1.1162
|
|
11.0
|
1.1797
|
|
11.5
|
1.2432
|
|
12.0
|
1.3067
|
|
12.5
|
1.3702
|
|
13.0
|
1.4336
|
|
13.5
|
1.4971
|
|
14.0
|
1.5606
|
|
14.5
|
1.6241
|
|
15.0
|
1.6876
|
|
15.5
|
1.7511
|
|
16.0
|
1.8146
|
|
16.5
|
1.8781
|
|
17.0
|
1.9415
|
|
17.5
|
2.0050
|
|
18.0
|
2.0685
|
|
18.5
|
2.1320
|
|
19.0
|
2.1955
|
|
19.5
|
2.2590
|
|
20.0
|
2.3225
|
|
20.5
|
2.3859
|
|
21.0
|
2.4494
|
|
21.5
|
2.5129
|
|
22.0
|
2.5764
|
|
22.5
|
2.6399
|
|
23.0
|
2.7034
|
|
23.5
|
2.7669
|
|
24.0
|
2.8303
|
|
24.5
|
2.8938
|
|
25.0
|
2.9573
|
|
25.5
|
3.0208
|
|
26.0
|
3.0843
|
|
26.5
|
3.1478
|
|
27.0
|
3.2113
|
|
27.5
|
3.2748
|
|
28.0
|
3.3382
|
|
28.5
|
3.4017
|
|
29.0
|
3.4652
|
|
All Years Greater than 29.0
|
3.5287
|
|
(Note. Interest charges began in 1977.)
|
Line 53.
Report this amount as additional tax (ADT) on the appropriate line of your income tax return (e.g., for Form 1040
filers, include this amount as
part of the total for line 63 of your 2006 Form 1040 and enter “ ADT” to the left of the line 63 entry space).
Part IV—U.S. Recipients of Gifts or Bequests Received During the Current Tax Year From Foreign Persons
Note.
Penalties may be imposed for failure to report gifts that should be reported. See Penalties on page 2.
A gift to a U.S. person does not include any amount paid for qualified tuition or medical payments made on behalf of the U.S.
person.
If a foreign trust makes a distribution to a U.S. beneficiary, the beneficiary must report the amount as a distribution in
Part III, rather than as
a gift in Part IV.
Contributions of property by foreign persons to domestic or foreign trusts that have U.S. beneficiaries are not reportable
by those beneficiaries
in Part IV unless they are treated as receiving the contribution in the year of the transfer (e.g., the beneficiary is an
owner of that portion of the
trust under section 678).
A domestic trust that is not treated as owned by another person is required to report the receipt of a contribution to the
trust from a foreign
person as a gift in Part IV.
A domestic trust that is treated as owned by a foreign person is not required to report the receipt of a contribution to
the trust from a foreign
person. However, a U.S. person should report the receipt of a distribution from such a trust as a gift from a foreign person
in Part IV.
Line 54.
To calculate the threshold amount ($100,000), you must aggregate gifts from different foreign nonresident aliens and
foreign estates if you know
(or have reason to know) that those persons are related to each other (see definition of related person on page 3) or one
is acting as a nominee or
intermediary for the other. For example, if you receive a gift of $75,000 from nonresident alien individual A and a gift of
$40,000 from nonresident
alien individual B, and you know that A and B are related, you must answer “ Yes” and complete columns (a) through (c) for each gift.
If you answered “ Yes” to the question on line 54 and none of the gifts or bequests received exceeds $5,000, do not complete columns (a)
through (c) of line 54. Instead, enter in column (b) of the first line: “ No gifts or bequests exceed $5,000.”
Line 55.
Answer “ Yes” if you received aggregate amounts in excess of $12,760 during the current tax year that you treated as gifts from foreign
corporations or foreign partnerships (or any persons that you know (or have reason to know) are related to such foreign corporations
or foreign
partnerships).
For example, if you, a calendar-year taxpayer during 2006, received $5,000 from foreign corporation X that you treated
as a gift, and $8,000 that
you received from nonresident alien A that you treated as a gift, and you know that X is wholly owned by A, you must complete
columns (a) through (g)
for each gift.
Note.
Gifts from foreign corporations or foreign partnerships are subject to recharacterization by the IRS under section 672(f)(4).
Line 56.
If you answered “ Yes” to the question on line 56 and the ultimate donor on whose behalf the reporting donor is acting is a foreign
corporation or foreign partnership, attach an explanation including the ultimate foreign donor's name, address, identification
number (if any), and
status as a corporation or partnership.
If the ultimate donor is a foreign trust, treat the amount received as a distribution from a foreign trust and complete
Part III.
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