§6048 Information with Respect to Certain Foreign Trusts

Summary

Require a written notice to the Secretary within 90 days (or a later day the Secretary allows) after certain events involving a foreign trust. The notice must give the information the Secretary asks for, including how much money or property was put into the trust and the identity of the trust, its trustees, and its beneficiaries (or beneficiary classes). The covered events are creating a foreign trust by a U.S. person, a U.S. person transferring money or property to a foreign trust (including by death), and the death of a U.S. citizen or resident if the decedent was treated as an owner of any part of a foreign trust or part of a foreign trust was in the decedent’s gross estate. Transfers for fair market value and trusts described in sections 402(b), 404(a)(4), 404A, or determined to be 501(c)(3) charities are not reportable. The “responsible party” who must give notice is the grantor for an inter vivos trust, the transferor for a non‑death transfer, or the executor for a death. If a U.S. person is treated as the owner of any part of a foreign trust for a tax year, that person must give the Secretary the information the Secretary requires and must make sure the trust files a full return with an accounting, the name of a U.S. agent, and other required details. The trust must also give required information to U.S. owners and anyone who gets distributions. If a trust has no U.S. agent, the Secretary will determine amounts to be reported and the trust must authorize a U.S. limited agent for the Secretary’s record‑and‑testimony requests (under sections 7602, 7603, 7604). U.S. persons who receive distributions from a foreign trust must report the trust’s name, total distributions, and other required facts. If adequate records are not provided, distributions may be taxed as accumulation distributions and, for section 668 purposes, the relevant number of years is one‑half the trust’s age. Rules also say to ignore parts of a trust treated as owned by someone else when deciding who made a transfer or got a distribution; a U.S. trust with substantial foreign activities or property can be treated as a foreign trust; the Secretary sets filing times and forms; the Secretary may suspend or change requirements if there is no significant U.S. tax interest; and U.S. returns must be consistent with trust returns or the Secretary must be notified of any difference.