Help completing Form 3520-A

sunny · Post by **sunny** » Thu Sep 08, 2011 9:22 pm

I think I have confused myself when filling out Form 3520 (page 2).
I don't see on my financial statements from investment company for RESP that I have received "interest". Either just dividends, Education Savings grant and change in value of investment.

On part II of 3520-A "Foreign Trust Income Statement", line 1 "interest" - I was thinking about reporting the gain or loss in value there, ever though it is a paper gain or loss. Nothing has been sold or transferred. I guess I thought I have to pay tax each year on the gain. But now I am thinking that nothing should be put on the interest line and that the gain in value is not taxed, but just entered on Part III, line 18 "Accumulated trust income". Is this where the MTM penalty comes in?
On part II of 3520-A line 2, of course, I entered the dividends reinvested.
I put the Canada Education Savings grant on line 7 "other Income" with a note identifying that it is the grant.

Help?

nelsona · Post by **nelsona** » Thu Sep 08, 2011 9:29 pm

Its all taxable on your 1040

sunny · Post by **sunny** » Fri Sep 09, 2011 11:07 pm

If I could only get through this roadblock I am having with reporting RESP (as a foreign trust) to Form 1040.
Is this correct logic, please:
1. Report the dividend from the RESP (a mutual fund with a major investment co) on Schedule B and 1040 - line 9a
2. Report the gain/loss (which is on paper only - no sales) as "undistributed capital gains" on schedule D and 1040 - line 13
3. Report the Canada Education Savings Grant on 1040 line 21 as "other income"

nelsona · Post by **nelsona** » Sat Sep 10, 2011 7:57 am

Sure. And don't forget the PFIC reporting on the mutula fund.