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Question

Why isn’t Schedule B from Form 3520, Part III calculating?

Answer

You can only use Form 3520, Part III, Schedule B to calculate trust distributions if you mark Yes for the Screen 3520-2, Foreign Nongrantor Trust Beneficiary Statement received? and Use actual calculation of trust distributions? fields. These fields are in the Part III - Distributions to U.S. Person From Foreign Trust section of Screen 3520-2. You can use Schedule B only if the following are true.

• The Foreign Nongrantor Trust Beneficiary Statement was received.
• The Foreign Nongrantor Trust Beneficiary Statement is being attached to Form 3520.
• Either Schedule A was never previously used for this foreign trust, or this foreign trust was terminated during the year.

When you use Schedule B, Schedule A is subsequently disabled. Schedule C is then required if either method results in an amount being treated as an accumulated distribution. For more information, see 1040-US: Interest charge calculation from Form 3520, Part III, Schedule C and http://www.irs.gov/pub/irs-pdf/i3520.pdf.

Related topic: Form 3520 - Foreign Trust Transactions FAQs (1040)

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