Large foreign gifts
You received more than $100,000 in gifts or a bequest from a nonresident alien or foreign estate during the year.
Specialized Filing
Form 3520 Filing Help
Received a large gift or inheritance from someone outside the U.S.? The money itself is usually not taxable — but if it crosses the reporting threshold, Form 3520 is required, and the penalty for missing it can reach 25% of the gift.
As an international tax specialist, I prepare Form 3520 for foreign gifts, inheritances, and foreign trust transactions — and build the reasonable-cause record when a prior year was missed.
Who This Applies To
Foreign inheritances
An inheritance from a non-U.S. person is reportable on Form 3520 — the money is usually not taxed, but the report is required.
Foreign trust transactions
Transfers to, distributions from, or ownership of a foreign trust carry their own, larger 3520 penalties.
Gifts from foreign companies
Gifts from foreign corporations or partnerships are reportable at a much lower threshold than gifts from individuals.
What I Do
Most Form 3520 problems are not about tax owed — they are about a required report that was never filed. I make sure the report is complete and, when it is late, defensible.
- Determine whether your gift, inheritance, or trust event is actually reportable
- Prepare Form 3520 (and Form 3520-A when a foreign trust is involved)
- Document the source and character of the funds to close off tax questions
- Draft a reasonable-cause statement for late or missed prior-year filings
- Coordinate with FBAR and Form 8938 if the funds landed in foreign accounts
Full Return, Handled End-to-End: A foreign gift often arrives alongside foreign accounts. I handle the 3520 and the related FBAR and 8938 together so the whole picture is consistent.
Penalty Awareness — Form 3520 Exposure
Unreported Foreign Gift
Up to 25%
5% of the gift or bequest for each month it goes unreported, capped at 25% of the total — unless you show reasonable cause.
Foreign Trust Transactions
35%
The greater of $10,000 or 35% of the gross value transferred to or distributed from a foreign trust.
Reporting Threshold
$100,000
Aggregate gifts or bequests from a nonresident alien or foreign estate in a year. The threshold for gifts from foreign companies is much lower (about $20,000).
Reasonable Cause
Relief
Late Form 3520s can often be abated with a well-documented reasonable-cause statement when there was no willful neglect.
A foreign inheritance is rarely taxable — but failing to report it can cost a quarter of its value. If a prior year was missed, a documented reasonable-cause filing is the first step.
Form 3520 Questions
Form 3520 FAQ
Do I owe tax on a foreign gift or inheritance?
Usually not. Gifts and inheritances from a non-U.S. person are generally not subject to U.S. income tax for the recipient. Form 3520 is an information report, not a tax bill — but failing to file it carries a penalty even though no tax is due.
When do I have to file Form 3520 for a foreign gift?
When gifts or bequests from a nonresident alien or foreign estate total more than $100,000 in a year. Gifts from foreign corporations or partnerships are reportable at a much lower, inflation-adjusted threshold (about $20,000). Once the threshold is crossed, you report the gifts on Form 3520 with your tax return.
What is the penalty for not reporting a foreign gift?
For unreported foreign gifts, the penalty is 5% of the value of the gift for each month it is not reported, up to a maximum of 25% of the gift, unless you can show reasonable cause. That is a substantial penalty on money that was never taxable in the first place.
What about foreign trusts?
Transfers to a foreign trust, distributions from one, and U.S. ownership of one are all reportable on Form 3520 (and Form 3520-A for the trust itself). The penalties are larger: generally the greater of $10,000 or 35% of the gross value of the transfer or distribution.
I found out I should have filed 3520 years ago. What now?
You file the delinquent Form 3520 with a reasonable-cause statement explaining why it was late. Because these penalties are often assessed automatically, the quality of that statement matters a great deal. Filing before the IRS contacts you gives you the strongest position for abatement.
Is Form 3520 the same as the FBAR?
No. Form 3520 reports the gift, inheritance, or trust event; the FBAR (FinCEN 114) reports the foreign accounts the money may sit in afterward. If your foreign gift landed in a foreign bank account, you may need both — I handle them together. See my FBAR filing page.
About Your Preparer
Prepared Personally by Tajma Qorri
Tajma Qorri is the founder of Qorri Tax Service LLC and an international tax specialist with more than 10 years in public accounting at Plante Moran, Grant Thornton, and Dean Dorton. Her focus is cross-border compliance — Forms 5471, 5472, 3520, and 8938; FBAR reporting; streamlined filing procedures; and tax-treaty analysis — for individuals and small businesses.
Every engagement is handled directly by Tajma, never passed to junior staff, and she has filed returns for clients in all 50 states. You get a firm, flat-fee quote before any work begins.
Form 3520 Help in Chicago and Nationwide
Qorri Tax works from an office at 222 S Prospect Ave in Park Ridge, IL, serving Chicago-area clients in person and clients in all 50 states remotely. Whether you are around the corner or across the country, Form 3520 preparation is handled the same way — directly by Tajma, start to finish.
Form 3520 engagements are quoted as a flat fee up front, based on whether a gift, inheritance, or foreign trust is involved. See pricing →
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