Just a reminder that if you are a US person with interests in any of the following entities:
* trusts created outside the US, into which you have transferred assets, or
* companies formed outside the US, of which you are a 10% or greater shareholder, or
* partnerships formed outside the US, of which you are a more than 50% partner,
you will probably have one or more of the following disclosures to file in addition to Form 1040:
* foreign trusts: Form 3520 Annual Return to Report Transactions With Foreign Trusts and Receipt of Certain Foreign Gifts, and
* Form 3520-a Annual Information Return of Foreign Trust with a US Owner,
* foreign shareholding: Form 5471 Information Return for US Persons With Respect to Certain Foreign Corporations,
* foreign partnership (controlling interest) form 8865 Return of US Persons with Respect to Certain Foreign Partnerships.
The due dates are generally the same as for Form 1040, with or without extension of time.
However, form 3520-a is due by the 15th day of the third month following the end of the foreign trust’s tax year.
This is due to the foreign Grantor Trust Owner Statement and the Foreign Grantor Trust Beneficiary Statements that need to be furnished to those individuals by the preparer of form 3520-a.
For NZ trusts with a standard balance date of 31 March, the due date is therefore 15 June 2011.
Penalties for failure to comply with the disclosure requirements can be hefty and include up to US$10,000 per corporation for Form 5471 non-compliance, and up to 35% of the gross value of assets transferred to a foreign trust for failure to comply with form 3520 requirements.
I have many clients for whom I am currently preparing all of the above disclosures and am well versed in the complexities in both determining these disclosure requirements on a case-by-case basis, and the return preparation itself.