Fair Market Value Sale Exception to Foreign Trust Reporting

§ 6048. Information with respect to certain foreign trusts(a) Notice of certain events(1) General ruleOn 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 noticeThe notice required by paragraph (1) shall contain such information as the Secretary may prescribe, including—(A) the amount of money or other property (if any) transferred to the trust in connection with the reportable event, and (B) the identity of the trust and of each trustee and beneficiary (or class of beneficiaries) of the trust. (3) Reportable eventFor purposes of this subsection—(A) In generalThe term “reportable event” means—(i) the creation of any foreign trust by a United States person, (ii) the transfer of any money or property (directly or indirectly) to a foreign trust by a United States person, including a transfer by reason of death, and (iii) the death of a citizen or resident of the United States if—(I) the decedent was 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, or (II) any portion of a foreign trust was included in the gross estate of the decedent. (B) Exceptions(i) Fair market value salesSubparagraph (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. (ii) Deferred compensation and charitable trustsSubparagraph (A) shall not apply with respect to a trust which is—(I) described in section 402(b), 404(a)(4), or 404A, or (II) determined by the Secretary to be described in section 501(c)(3). (4) Responsible partyFor purposes of this subsection, the term “responsible party” means—(A) the grantor in the case of the creation of an inter vivos trust, (B) the transferor in the case of a reportable event described in paragraph (3)(A)(ii) other than a transfer by reason of death, and (C) the executor of the decedent’s estate in any other case. (b) United States owner of foreign trust(1) In generalIf, 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—(A) such trust makes a return for such year which sets forth a full and complete accounting of all trust activities and operations for the year, the name of the United States agent for such trust, and such other information as the Secretary may prescribe, and