§ 6048. Information with respect to certain foreign trusts
(a)
Notice of certain events
(1)
General rule
On or before the 90th day (or such later day as the Secretary may prescribe) after any reportable event, the responsible party shall provide written notice of such event to the Secretary in accordance with paragraph (2).
(2)
Contents of notice
The notice required by paragraph (1) shall contain such information as the Secretary may prescribe, including—
(3)
Reportable event
For purposes of this subsection—
(A)
In general
The term “reportable event” means—
(B)
Exceptions
(i)
Fair market value sales
Subparagraph (A)(ii) shall not apply to any transfer of property to a trust in exchange for consideration of at least the fair market value of the transferred property. For purposes of the preceding sentence, consideration other than cash shall be taken into account at its fair market value and the rules of section
679
(a)(3) shall apply.
(b)
United States owner of foreign trust
(1)
In general
If, at any time during any taxable year of a United States person, such person is treated as the owner of any portion of a foreign trust under the rules of subpart E of part I of subchapter J of chapter 1, such person shall submit such information as the Secretary may prescribe with respect to such trust for such year and shall be responsible to ensure that—
(2)
Trusts not having United States agent
(A)
In general
If the rules of this paragraph apply to any foreign trust, the determination of amounts required to be taken into account with respect to such trust by a United States person under the rules of subpart E of part I of subchapter J of chapter 1 shall be determined by the Secretary.
(B)
United States agent required
The rules of this paragraph shall apply to any foreign trust to which paragraph (1) applies unless such trust agrees (in such manner, subject to such conditions, and at such time as the Secretary shall prescribe) to authorize a United States person to act as such trust’s limited agent solely for purposes of applying sections
7602,
7603, and
7604 with respect to—
(i)
any request by the Secretary to examine records or produce testimony related to the proper treatment of amounts required to be taken into account under the rules referred to in subparagraph (A), or
The appearance of persons or production of records by reason of a United States person being such an agent shall not subject such persons or records to legal process for any purpose other than determining the correct treatment under this title of the amounts required to be taken into account under the rules referred to in subparagraph (A). A foreign trust which appoints an agent described in this subparagraph shall not be considered to have an office or a permanent establishment in the United States, or to be engaged in a trade or business in the United States, solely because of the activities of such agent pursuant to this subsection.
(c)
Reporting by United States beneficiaries of foreign trusts
(1)
In general
If any United States person receives (directly or indirectly) during any taxable year of such person any distribution from a foreign trust, such person shall make a return with respect to such trust for such year which includes—
(2)
Inclusion in income if records not provided
(A)
In general
If adequate records are not provided to the Secretary to determine the proper treatment of any distribution from a foreign trust, such distribution shall be treated as an accumulation distribution includible in the gross income of the distributee under chapter 1. To the extent provided in regulations, the preceding sentence shall not apply if the foreign trust elects to be subject to rules similar to the rules of subsection (b)(2)(B).
(d)
Special rules
(1)
Determination of whether United States person makes transfer or receives distribution
For purposes of this section, in determining whether a United States person makes a transfer to, or receives a distribution from, a foreign trust, the fact that a portion of such trust is treated as owned by another person under the rules of subpart E of part I of subchapter J of chapter 1 shall be disregarded.
(2)
Domestic trusts with foreign activities
To the extent provided in regulations, a trust which is a United States person shall be treated as a foreign trust for purposes of this section and section
6677 if such trust has substantial activities, or holds substantial property, outside the United States.
(3)
Time and manner of filing information
Any notice or return required under this section shall be made at such time and in such manner as the Secretary shall prescribe.