Are Form 3520 Bequests 2023-2024

Hi, my name is Clinton Donnelly from Bobby Tax Law. Today, I want to talk about Form 3520 which is an annual return for people who have had financial interactions with trusts or received gifts from foreign persons. This is an informational return and, like all international information returns, the focus is on money laundering. There is no tax for failing to file this return, however, there are very stiff penalties if you do not file it or file it incorrectly. Money laundering is about the conversion of illegal profits, usually from crime, into legal legitimate funds and assets. A trust is one of the most slippery devices out there to facilitate money laundering. So, you can have illegal donations to a trust, and then the trust gives a payout, gift, distribution, or transfer to someone else, and all of a sudden it looks legitimate. The IRS is very inquisitive about all the details related to this. This return is mandatory if you have received one. It applies to four different types of people. The first person would be someone who has made a transfer to a trust. Oftentimes, trusts are grantor trusts, which means somebody granted their own assets to the trust. So, that person is actually making a transfer of their own assets to the trust. Those transfers need to be recorded and reported on Form 3520. They should also be reported on Form 926, which is the transfer of assets to foreign persons. In this case, a foreign trust. The second use of Form 3520 is for an owner of a trust, who is probably someone who is the grantor. Typically, there are very few owners of a trust. It's usually an individual, a couple, or a family. The third use of this form is for someone who has received a...