Electing full-year MFJ with a closed TFSA: does the §1.6048-5(b)(4) de minimis exemption get me out of 3520/3520-A?

[canus56user]

Moved from Canada to the US mid-2025. I’m a new green card holder, wife’s a US citizen, and we’re planning to make the full-year election (§6013(h)) so we’re both treated as residents for all of 2025.

My question is on TFSA reporting assuming it is a foreign trust.

Details:
* Wealthsimple robo-advisor TFSA, held Canadian ETFs. Under $30k, never went over $50k.
* Closed it before my green card date, while I was still an NRA.
* Under the election I’ll report the 2025 earnings and the PFIC sale (8621) on the return anyway.
* On extension, so the 1040 and any 3520 aren’t due till Oct.
The way I read it, this lands in §1.6048-5(b)(4), the “tax-favored foreign de minimis savings trust” bucket - it’s general-purpose so it’s not (b)(2) retirement or (b)(3) medical/education, it’s under the $50k value cap, it’s tax-favored in Canada, and it’s reported to CRA. I’m relying on the proposed regs per the 2025 3520 instructions (years ending after 5/8/24, applied consistently).
Am I interpreting this correctly?

The one thing nagging me: the (b)(1) exemption language lists (b)(2) and (b)(3) but doesn’t mention (b)(4). The AICPA comment letter on these regs (item 2.H) actually calls this out as a drafting error and says the intent was clearly to exempt de minimis savings trusts too, same as the other two. So I’m reading the omission as a slip that’ll get cleaned up in the final regs.

Has anyone actually taken the (b)(4) position on a filed return? Not looking for “just file the 3520-A to be safe” unless you genuinely think (b)(4) doesn’t hold up.

Proposed REG–124850–08: https://www.federalregister.gov/documen ... trusts-and