Is a TFSA a "foreign trust"?

[cfn2007]

Getting a Canadian bank or broker to complete the 3520A strikes me as mission impossible at this time (given that it is all new). I can't imagine the run-around the bank would give you. Back in 2003, did banks willingly fill these out for RRSPs?

I have been digging through the forms and instructions and it does (sort of) give you an alternative:

Line 22 of the Form 3520 says, "Did the foreign trust file Form 3520-A for the current year? If “Yes,â€￾ attach the Foreign Grantor Trust Owner Statement you received from the foreign trust. If “No,â€￾ to the best of your ability, complete and attach a substitute Form 3520-A for the foreign trust. See instructions for information on penalties."

This says you can just fill out the 3520A yourself (if your bank doesn't provide). That seems to make sense and much less difficult than trying to explain it to your bank/broker. Unfortunately, the instructions for Line 22 also says, "If “No,â€￾ you may be liable for a penalty of 5% of the trust assets that you are treated as owning, plus additional penalties for continuing failure to file after notice by the IRS."

Filling out a substitute 3520A "to the best of your ability" might be the best approach available for now???

[MIKE2000Z28]

According to this guy, its covered in the tax treaty as an account similar to an IRA and not have to fill out a form 3520.

http://www.youtube.com/watch?v=Et-cgSL9wJs

[MIKE2000Z28]

meant to say similar to a Roth IRA

[nelsona]

He's wrong.

[nelsona]

Even RRSP's which are fully recognized as pension accounts by IRS, are subject to 3520 reporting as foreign trusts.