Ending 3520/3520A for RESP

This is our main tax information forum which deals with topics concerning Canadians living and working in the U.S., U.S. citizens contemplating working in Canada, and all aspects of Canadian and U.S. income tax and related adminstrative issues.

Moderator: Mark T Serbinski CA CPA

Post Reply
Posts: 234
Joined: Tue Aug 30, 2011 12:15 am

Ending 3520/3520A for RESP

Post by CdnAmerican » Fri Aug 28, 2020 10:59 pm

Hi all - I have an RESP which I have filed the 3520/3520A for each year. With the new IRS ruling that an RESP no longer requires a 3520/3520A, how do I stop filing these? It might be as simple as not filing it this year, but the $10K penalty scares me. Should I:
1) file for one more year, and check the box "final return",
2) send a letter stating that this does not actually require a 3520/3520A, or
3) something else (e.g., call the IRS or ask for a letter indicating a 3520 is no longer needed)?

Not a professional opinion.

Posts: 11
Joined: Fri Dec 14, 2018 11:18 pm

Re: Ending 3520/3520A for RESP

Post by cqhg » Tue Sep 01, 2020 12:51 am

I made a final return for RESP this year, the 10K penalty scares me too

Posts: 309
Joined: Fri Jun 22, 2012 9:23 am
Location: Canada

Re: Ending 3520/3520A for RESP

Post by MGeorge » Wed Sep 02, 2020 12:02 pm

I agree. Those robo letters are scary. I will file a final return with an explanation attached the end. One thing to consider is that if there is a non-zero balance included on the balance sheet for form 3520A, the system might expect another return in future years. It might be best to fill out 3520A as if the trust was closed and all balances distributed, then explain in an attachment for any human reader.

I'm interested in what others have to say.
MGeorge is neither an accounting nor taxation professional.

Posts: 158
Joined: Thu Feb 21, 2013 5:28 pm

Re: Ending 3520/3520A for RESP

Post by ND » Wed Sep 02, 2020 8:03 pm

Make sure to note that you can contribute a lifetime maximum of CAD $50,000 per beneficiary to an RESP. Note that RESPs that are designed as family plans with more than four named beneficiaries can exceed the $200,000 US lifetime contribution threshold and thereby lose said 3520 exemption. ‘Contributions to the trust are limited to $10,000 or less annually or $200,000 or less on a lifetime basis, determined using the U.S. Treasury Bureau of Fiscal Service foreign currency conversion rate on the last day of the tax year (available at https://www.fiscal.treasury.gov/reports ... s-exchange).’

Post Reply