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That is, the receipt of an accumulation distribution triggers an income tax (including an interest charge) for previous years even though the beneficiary may never have received anything from the trust in those years. Federal Income Tax Reporting: Form 1040NR Foreign grantor trusts would file a Form 1040NR indicating on Page 1 that (1) it is a grantor trust taxable under sections 671-679 of the Code and (2) that a statement of income taxable to the grantor is attached. As the regulations under section 1441 generally differentiate amongst whom the ultimate recipient of the income is, it is imperative that the foreign trust have in place the appropriate withholding forms to avoid the 30 percent at-source withholding on U. Mechanics of Filing: When/Who/How Form 1040NR is due on June 15th of the year following the calendar year when the nonresident alien individual, estate or trust received the taxable income. The Form 1040NR in this case is due by April 15th of the year following the receipt of the wages. domestic partnership, corporation, trust or estate. Part II provides information on the owner of a foreign trust settled by a U. Form 3520 is filed separately from the personal income tax return of the U. settlor, transferor or recipient and is due on the date of such personal income tax return, including extensions. It is a good practice to attach a copy of the personal tax return extension to the Form 3520 to avoid notices concerning late filing penalties. Potential Penalties There are significant penalties for not filing the form in a timely manner.

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