Specific Cases
Form 3520: When It Actually Applies to Korean Inheritance
In Brief
Form 3520 applies when you receive over $100,000 from a foreign person (a Korean-citizen decedent who was never US-domiciled) or from a foreign trust. It does NOT apply when a US-citizen or US-domiciled parent dies — that triggers Form 706 instead.
The Decedent's Status Is the Trigger
This is the most common mistake. Form 3520 reports gifts and inheritances from foreign persons — not from the location of assets. The question is: was the source a US person or a foreign person?
| Scenario | Form 3520? |
|---|---|
| Korean-citizen parent (never US-domiciled) dies → you inherit | ✅ Yes (if > $100K) |
| Korean grandparent gifts you $200K during their lifetime | ✅ Yes |
| Korean family trust distributes to you | ✅ Yes (+ Form 3520-A) |
| US-citizen parent (with Korean assets) dies | ❌ No → Form 706 |
| You inherit Korean bank accounts | ❌ No → FBAR / Form 8938 |
When Form 3520 IS Required
- Foreign-person decedent: a Korean citizen who lived in Korea their whole life
- Lifetime gift from foreign person: over $100K in a tax year
- Foreign trust distribution: Part III, often with Form 3520-A
Filing Requirements
Threshold: over $100,000 (individuals) per tax year (a proposed regulation may lower this to $19,570). Deadline: April 15 (June 15 if abroad, October 15 with extension). Filed separately from Form 1040, mailed to Ogden, UT.
The Penalty
Under IRC §6039F: 5% per month, capped at 25% of the unreported amount — even though no tax is owed. A $300K inheritance filed 6 months late = up to a $75,000 penalty for an informational form.
Missed Past Filings?
The IRS Streamlined Filing Compliance Procedures let non-willful taxpayers catch up with 0-5% penalty instead of 25%. See our Streamlined Filing guide.
US-Side Handled by Partners
We handle the Korean side; partner US attorneys file Form 3520.
Free ConsultationGeneral information only, not legal advice. US filings require a US-licensed professional.