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Foreign Trust Reporting Rules and Distribution Planning for U.S. Beneficiaries

A live 90-minute CLE/CPE video webinar with interactive Q&A

This program is included with the Strafford CLE Pass. Click for more information.
This program is included with the Strafford CPE+ Pass. Click for more information.
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Thursday, December 12, 2024

1:00pm-2:30pm EST, 10:00am-11:30am PST

Early Registration Discount Deadline, Friday, November 15, 2024

or call 1-800-926-7926

This CLE/CPE course will provide estate planners and tax counsel comprehensive guidance on the reporting rules for foreign trusts under U.S. tax law. The panel will discuss key provisions of the Internal Revenue Code applicable to foreign trusts, the reporting regime for U.S. taxpayers' ownership of foreign trust assets, gift and estate tax treatment, and reporting obligations of U.S. beneficiaries of foreign trusts and non-grantor trusts. The panel will provide an in-depth review of Form 3520 and discuss distribution planning for foreign trusts with U.S. beneficiaries.

Description

U.S. owners and beneficiaries of foreign trusts are subject to complex tax rules and reporting obligations that are different from those applicable to domestic trusts. Tax and estate planners must recognize the variety of tax issues associated with foreign trusts with U.S. owners or beneficiaries.

Tax and estate planners must determine under U.S. tax rules whether an arrangement is a trust, the residency of the trust as foreign or domestic, and the characterization of the trust. Determination of a trust's residency and characterization will determine the potential income and estate tax impact to the beneficiaries, including potential attribution of ownership entities owned by the trust and complex information reporting obligations.

For beneficiaries of foreign trusts, Form 3520, Annual Return to Report Transactions with Foreign Trusts and Receipt of Certain Foreign Gifts, presents significant complexity under current tax law. Even if no transactions related to the trust occurred during the tax year, the IRS requires taxpayers who owned any part of the assets held in a foreign trust, received a distribution from a foreign trust, or who qualify as the responsible party for reporting a foreign "reportable event," to file Form 3520.

Tax and estate planning advisers must establish strategies to ensure that U.S. owners and beneficiaries of foreign trusts avoid any unintended tax liability on interests of foreign trusts, including such trusts' interest in foreign partnerships or corporations while avoiding foreign anti-deferral rules.

Listen as our panel discusses key provisions of the Internal Revenue Code applicable to foreign trusts, the reporting regime for U.S. taxpayers' ownership of foreign trust assets, gift and estate tax treatment, Form 3520, and other key items regarding foreign trust reporting.

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Outline

  1. Issues of foreign trusts with U.S. beneficiaries in estate planning
  2. Determining tax residency and applicable rules
  3. Understanding tax rules and reporting obligations of foreign trusts for U.S. estates and taxpayers
  4. Foreign grantor trust vs. foreign non-grantor trust
  5. Obtaining a tax-free step-up in basis
  6. Applicability of foreign anti-deferral rules and methods to avoid them

Benefits

The panel will discuss these and other key issues:

  • What are the filing requirements for the U.S. beneficiary of a foreign trust?
  • Avoiding pitfalls of complex tax rules and reporting obligations
  • Understanding residency rules and the use of domestication to benefit the estate
  • What "reportable events" trigger a Form 3520 filing requirement?
  • What is the overlap between Form 3520 and other foreign information reporting requirements?
  • What are the penalties and relief provisions for failing to file necessary forms?
  • Effective techniques to avoid foreign anti-deferral rules
  • Best practices for counsel regarding the taxation of foreign trusts

Faculty

Lipoff, Lawrence
Lawrence M. Lipoff, CPA, TEP

Director
CohnReznick

With more than 30 years of experience, Mr. Lipoff specializes in the delivery of domestic and international private...  |  Read More

Additional faculty
to be announced.
Attend on December 12

Early Discount (through 11/15/24)

See NASBA details.

Cannot Attend December 12?

Early Discount (through 11/15/24)

You may pre-order a recording to listen at your convenience. Recordings are available 48 hours after the webinar. CPE credit is not available on recordings. Strafford will process CLE credit for one person on each recording. All formats include course handouts.

To find out which recorded format will provide the best CLE option, select your state:

CLE On-Demand Video

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