26 U.S.C. § 6048 : US Code - Section 6048: Information with respect to certain foreign trusts

Search 26 U.S.C. § 6048 : US Code - Section 6048: Information with respect to certain foreign trusts

(a) Notice of certain events
(1) General rule
On or before the 90th day (or such later day as the Secretary
may prescribe) after any reportable event, the responsible party
shall provide written notice of such event to the Secretary in
accordance with paragraph (2).
(2) Contents of notice
The notice required by paragraph (1) shall contain such
information as the Secretary may prescribe, including -
(A) the amount of money or other property (if any)
transferred to the trust in connection with the reportable
event, and
(B) the identity of the trust and of each trustee and
beneficiary (or class of beneficiaries) of the trust.
(3) Reportable event
For purposes of this subsection -
(A) In general
The term "reportable event" means -
(i) the creation of any foreign trust by a United States
person,
(ii) the transfer of any money or property (directly or
indirectly) to a foreign trust by a United States person,
including a transfer by reason of death, and
(iii) the death of a citizen or resident of the United
States if -
(I) the decedent was treated as the owner of any portion
of a foreign trust under the rules of subpart E of part I
of subchapter J of chapter 1, or
(II) any portion of a foreign trust was included in the
gross estate of the decedent.
(B) Exceptions
(i) Fair market value sales
Subparagraph (A)(ii) shall not apply to any transfer of
property to a trust in exchange for consideration of at least
the fair market value of the transferred property. For
purposes of the preceding sentence, consideration other than
cash shall be taken into account at its fair market value and
the rules of section 679(a)(3) shall apply.
(ii) Deferred compensation and charitable trusts
Subparagraph (A) shall not apply with respect to a trust
which is -
(I) described in section 402(b), 404(a)(4), or 404A, or
(II) determined by the Secretary to be described in
section 501(c)(3).
(4) Responsible party
For purposes of this subsection, the term "responsible party"
means -
(A) the grantor in the case of the creation of an inter vivos
trust,
(B) the transferor in the case of a reportable event
described in paragraph (3)(A)(ii) other than a transfer by
reason of death, and
(C) the executor of the decedent's estate in any other case.
(b) United States owner of foreign trust
(1) In general
If, at any time during any taxable year of a United States
person, such person is treated as the owner of any portion of a
foreign trust under the rules of subpart E of part I of
subchapter J of chapter 1, such person shall be responsible to
ensure that -
(A) such trust makes a return for such year which sets forth
a full and complete accounting of all trust activities and
operations for the year, the name of the United States agent
for such trust, and such other information as the Secretary may
prescribe, and
(B) such trust furnishes such information as the Secretary
may prescribe to each United States person (i) who is treated
as the owner of any portion of such trust or (ii) who receives
(directly or indirectly) any distribution from the trust.
(2) Trusts not having United States agent
(A) In general
If the rules of this paragraph apply to any foreign trust,
the determination of amounts required to be taken into account
with respect to such trust by a United States person under the
rules of subpart E of part I of subchapter J of chapter 1 shall
be determined by the Secretary.
(B) United States agent required
The rules of this paragraph shall apply to any foreign trust
to which paragraph (1) applies unless such trust agrees (in
such manner, subject to such conditions, and at such time as
the Secretary shall prescribe) to authorize a United States
person to act as such trust's limited agent solely for purposes
of applying sections 7602, 7603, and 7604 with respect to -
(i) any request by the Secretary to examine records or
produce testimony related to the proper treatment of amounts
required to be taken into account under the rules referred to
in subparagraph (A), or
(ii) any summons by the Secretary for such records or
testimony.
The appearance of persons or production of records by reason of
a United States person being such an agent shall not subject
such persons or records to legal process for any purpose other
than determining the correct treatment under this title of the
amounts required to be taken into account under the rules
referred to in subparagraph (A). A foreign trust which appoints
an agent described in this subparagraph shall not be considered
to have an office or a permanent establishment in the United
States, or to be engaged in a trade or business in the United
States, solely because of the activities of such agent pursuant
to this subsection.
(C) Other rules to apply
Rules similar to the rules of paragraphs (2) and (4) of
section 6038A(e) shall apply for purposes of this paragraph.
(c) Reporting by United States beneficiaries of foreign trusts
(1) In general
If any United States person receives (directly or indirectly)
during any taxable year of such person any distribution from a
foreign trust, such person shall make a return with respect to
such trust for such year which includes -
(A) the name of such trust,
(B) the aggregate amount of the distributions so received
from such trust during such taxable year, and
(C) such other information as the Secretary may prescribe.
(2) Inclusion in income if records not provided
(A) In general
If adequate records are not provided to the Secretary to
determine the proper treatment of any distribution from a
foreign trust, such distribution shall be treated as an
accumulation distribution includible in the gross income of the
distributee under chapter 1. To the extent provided in
regulations, the preceding sentence shall not apply if the
foreign trust elects to be subject to rules similar to the
rules of subsection (b)(2)(B).
(B) Application of accumulation distribution rules
For purposes of applying section 668 in a case to which
subparagraph (A) applies, the applicable number of years for
purposes of section 668(a) shall be 1/2 of the number of
years the trust has been in existence.
(d) Special rules
(1) Determination of whether United States person makes transfer
or receives distribution
For purposes of this section, in determining whether a United
States person makes a transfer to, or receives a distribution
from, a foreign trust, the fact that a portion of such trust is
treated as owned by another person under the rules of subpart E
of part I of subchapter J of chapter 1 shall be disregarded.
(2) Domestic trusts with foreign activities
To the extent provided in regulations, a trust which is a
United States person shall be treated as a foreign trust for
purposes of this section and section 6677 if such trust has
substantial activities, or holds substantial property, outside
the United States.
(3) Time and manner of filing information
Any notice or return required under this section shall be made
at such time and in such manner as the Secretary shall prescribe.
(4) Modification of return requirements
The Secretary is authorized to suspend or modify any
requirement of this section if the Secretary determines that the
United States has no significant tax interest in obtaining the
required information.
(5) United States person's return must be consistent with trust
return or Secretary notified of inconsistency
Rules similar to the rules of section 6034A(c) shall apply to
items reported by a trust under subsection (b)(1)(B) and to
United States persons referred to in such subsection.