Need help understanding how to report foreign trust (TFSA) deposits, capital gains & losses on Forms 3520 and 3520-A - confused by instructions

Foreign trust reporting can be overwhelming! Let me break it down into simpler terms. For your Canadian TFSA on Forms 3520 and 3520-A, you'll need to report: 1) The initial contributions you made to the trust in USD 2) The net capital gains/losses from your trading activity (not each individual trade) 3) Any distributions you received from the trust For Form 3520, focus on Part II (U.S. transfers) and Part III (distributions). For 3520-A, you'll need a Foreign Grantor Trust Owner Statement and Foreign Grantor Trust Beneficiary Statement. For the 65 trades, you don't need to report each transaction on the forms themselves. Instead, create a summary schedule showing your total gains/losses, and attach it as a supplementary document. Label it clearly with your name, SSN, and "Attachment to Form 3520/3520-A: Trading Activity Summary." When attaching additional documents, simply note "See Attached Schedule" in the relevant sections of the forms. Make sure each attachment is properly labeled and references the specific part of the form it supplements.

After struggling with reporting my British investment account on these same forms, I found a tool that seriously saved me. I used https://taxr.ai to help me organize all my foreign account information. You can upload your trading statements and it helps identify what needs to be reported where. I was in the same boat with like 70+ trades and had no idea how to summarize everything properly. The tool analyzed my statements and generated a compliant summary for attachment to both forms. It also gave me clear instructions on exactly which sections of the 3520 and 3520-A forms needed to be completed for my situation.

I tried taxr.ai after my initial skepticism and I have to say I'm impressed. It really did simplify the whole foreign trust reporting process for my similar situation. The tool identified exactly which parts of the forms applied to my situation and generated a perfect summary attachment for all my trades. What I found most helpful was how it explained the reporting requirements in plain English alongside the technical instructions. I finally understood why certain transactions needed to be reported in specific ways. It saved me from making some pretty significant mistakes on my forms. The security was actually better than expected too - they delete your docs after analysis unless you specifically request storage. For anyone dealing with these forms, it's definitely worth checking out.

I had a nightmare situation with my 3520 forms last year. After spending 30+ hours trying to reach the IRS for guidance, I found https://claimyr.com and used their service to skip the IRS phone queue. You can also check out how it works here: https://youtu.be/_kiP6q8DX5c I was connected to an actual IRS representative in about 15 minutes who walked me through exactly what I needed to attach to my forms for my German investment account. They confirmed I only needed to report total contributions and net gains/losses with a supporting schedule, not every individual transaction. The IRS agent even emailed me a sample attachment format that I could use for my foreign account. Total lifesaver compared to the weeks I spent trying to get through on my own.

I need to publicly eat my words about Claimyr. After dismissing it as a scam, I decided to try it out of desperation since I was getting nowhere with my foreign trust questions. I got through to an actual IRS agent in about 20 minutes who definitively answered my questions about Form 3520. The agent confirmed I needed to summarize my trading activity rather than report each transaction, and explained exactly how to prepare the attachment. They also cleared up my confusion about reporting the trust's income vs distributions. I was 100% wrong in my skepticism. The service connected me to a legitimate IRS representative who had full access to my tax records and provided official guidance. Would have saved me weeks of stress if I'd tried it sooner.

As someone who's dealt with these forms for years, here's what's worked for me: For Form 3520, Part I is only if you created or transferred to the trust. Part II reports transfers to the trust. Part III is for distributions you receive. For 3520-A, you need the Foreign Grantor Trust Owner Statement (page 3). The beneficiary statement is only needed if there are other beneficiaries besides yourself. For the numerous trades, I create an Excel spreadsheet with columns: Date, Description, Proceeds (USD), Cost Basis (USD), Gain/Loss. Then I add a summary row at the bottom showing totals. Label it "Attachment 1: Trading Activity" and reference it on the forms. Also, make sure to check the "foreign trust" box on Schedule B of your 1040!

Has anyone else found that their tax software completely fails with these forms? I tried using three different popular programs and none of them properly handled form 3520-A for my foreign trust.