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longlegsinlapaz
Super Nomad
Posts: 1685
Registered: 11-18-2005
Location: La Paz
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| Quote: | Originally posted by Juan del Rio
Here's what my friend told me on what tiggered the audit:
" Let Baja Nomads know that the IRS was auditing our company (which it seems they do every year) and started looking more into my personal matters and
where I live. They found that I live in Mexico and that I had sold some property and bought property. It just went on from there. The fine is
substantial."
We appreciate everyone who has been able to contribute some advice on this matter. Dealing with the IRS is not a "happy, happy, joy, joy" experience
for sure. |
Juan del Rio, as with Morgaine7, other than a letter from Uncle Sam asking for a number to fill line 9 on page 3 (actually 4 letters, one for each of
the 4 years I reported) your friend is the first person I've heard of regarding any action that the IRS is taking against anyone for failure to have
reported a fideicomiso as a trust. Do you think you could convince your friend to join Baja Nomad & keep us posted as to how his situation
evolves & how forgiving (or NOT!) the IRS is in dealing with their situation? No personal information, just what kind of stand the IRS takes
against him/her/them & the outcome.
The monetary & legal penalty threats alone scared me bad enough to research the hell out of the situation....the amnesty cut-off date being posted
here on BN was the FIRST I'd ever HEARD about fideicomiso = trust in the eyes of Uncle Sam....I'm glad I filed in
the 11th hour!! But I know a lot of people opted not to, so I think hearing some factual information could benefit a lot of people....if your friend
is willing to share their experience. Thanks!
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john68
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the American Institute of Certified Public Accountants (AICPA) asked the IRS for clarification on this matter over two years ago. To my knowledge,
the IRS never responded to the AICPA and has never issued a Revenue Ruling or a Private Letter Ruling on the subject. If I've missed something, I'd
like to know. It's a serious question and the opinion of a single Revenue Agent, without some legal authority, doesn't mean much to the rest of us
unless the case eventually goes to court (and I'm not making light of the financial pain this particular taxpayer will suffer).
http://www.aicpa.org/InterestAreas/Tax/Resources/TrustEstate...
It is possible to request a PLR or a Revenue Ruling from the National Office of the IRS on matters like this. There are the legal or accounting fees
and there's a substantial filing fee. After all that, the IRS can refuse to issue a ruling. But, if the National Office rules, the IRS will be bound
by the ruling. If you're seriously interested in the issue, contact a tax lawyer or CPA to request a ruling from the IRS.
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wessongroup
Platinum Nomad
Posts: 21152
Registered: 8-9-2009
Location: Mission Viejo
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Mood: Suicide Hot line ... please hold
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| Quote: | Originally posted by k-rico
| Quote: | Originally posted by wessongroup
Would offer it's a stretch to classify a Mexican Fideicomiso the same as a "Trust" formed within the United States ... as one normally see one..
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True, but this is for reporting foreign trusts. I don't know if you can assume a foreign trust needs to conform to the American definition to be
reportable. |
The bank technically owns the property and you get to live in or on it and/or sell it, the Bank most likely keeps these Mexican Fideicomiso within
their "Trust Departments" much like Bank in the United States ..
These Mexican Fideicomiso are not the same legally as a putting your assets into a Trust, created and formed by YOU the individual, who would
establish a Trust .. the Trust owns the assets not the Trust Department within a Bank nor the Bank ... the Trust Department may have a fiduciary
responsibility for the administration of the Trust ... but, they do not "own the assets of the Trust" and do not make management decision on
operations on the subject site, therefore they (Banks) incur no liability on any actions which may occur on the subject site... like environmental
contamination et al...
The Mexican Fideicomiso was set up to allow an American and/or foreigners to buy a house in Mexico in the Federal Zone.. that simple.. the Bank owns
the property/and or site .. They do this under a provision in Law which allows same which was adopted in 1994 which allows you access to the subject
property for 50 years... with conditional renewal of the agreement at the end of the 50 year holding of ownership by the Bank on the subject site.
One can make this into a reporting requirement if they wish.. I would not...
And asking for a ruling from the IRS is a way to "nail" it down ... for sure.. but, not sure all would be happy with what may be coming down from the
IRS at this time..
It would again be how the question is asked of the IRS..
As for turning people in for not filing.. who is developing this data?.. if it is coming from a Bank, CPA or any others with fiduciary responsibility,
would appear they would be opening them selves up to law suits ... by releasing this information without knowledge and authorization of the Mexican
Fideicomiso related to the subject site in question
Guess each neighbor could be suspect.. but.. that is really a stretch..
Just my 2 cents.. hope it helps
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longlegsinlapaz
Super Nomad
Posts: 1685
Registered: 11-18-2005
Location: La Paz
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| Quote: | Originally posted by wessongroup
One can make this into a reporting requirement if they wish.. I would not... |
To me, this is a personal decision that each individual fideicomiso-holder must research & decide on their own.
It's very difficult for those of us who live down here full-time to be in the information loop on this kind of thing when the IRS changes the rules of
the game. As I said in an earlier post, if this hadn't have been posted on BN, I could very likely be in the position that Juan del Rio's friend is
in....being audited & having stiff (IMO, ludicrous & unfair) fines levied.
But once I researched everything to the best of my ability, I decided the threats FAR outweighed my willingness to make a conscious decision not to
report. Completing the 6 pages of 3530 & the 3 pages if the 3520A is IMO, comparable to putting that proverbial square peg into a round hole!!
But to me, the bottom line was....as senseless as the requirement might appear to me, it's what the IRS has ruled we be held to & I'm not willing
to buck the IRS. I figured if all those tax lawyers, tax specialists & CPA's were not able to persuade the IRS of the fallacy of it's ways, then
I certainly couldn't! I knew going into the filing that all my work in retroactively completing all those years worth of reporting would be for
naught. It would not change my taxable amounts one cent because I'd already reported the sale of properties down here & if I didn't qualify for
Mexican or US capital gains then, I certainly wouldn't qualify by giving the same information on different forms!!
I understand that the IRS is looking for revenue from hidden sources, but I feel they're going about it all wrong! They're penalizing those who are
law-abiding in the hope of shaking a few criminal out of the woodwork, but anyone hiding income to begin with is not too likely to raise their hand
because of an "amnesty period". I filled all those pages out....55 pages in my case....and filed them in hopes that the
small percentage of people who did fear the threats enough to file would create a huge deluge of paperwork for the IRS to have to sift through to gain
no revenue & decide this tactic was a lost cause!
There are many holes in their thought processes:
~ Fideicomiso does not fit the USA definition of a Trust in that there is no $ passing through it in or out. It does not earn nor pay out $.
~ It is aimed at a very small number of US citizens who own property in Mexico, as fideicomisos are only required within about 50 miles of the
ocean....those living 51 miles from the water are exempt!
~ Those on leased land or renting are exempt.
But the bottom line for me was I ain't in a financial position to buck Uncle Sam! So I gave what was asked/demanded/threatened of me in the hope
they'd be more careful what they asked for in the future. Our tax dollars went towards paying all those new people they had to hire to go through
all those pages they asked for & I'd be willing to bet this venture ended up costing more than it gained them in revenue!!! 
If I remember correctly, it wasn't just "an article" that Amy P. Jetel wrote, it was a legal challenge that she actually filed with the IRS as a legal
effort to get them to reverse their position....for naught!
Even the IRS "Trust Specialists" were giving out 100 different answers to the same questions being addressed to them in August 2009 via their
toll-free number!! It took over a month for their 24-hour online help staff to tell me they couldn't answer my questions....I actually received that
answer well after the 9/23/09 amnesty cutoff! 
IMO, this is something the IRS decided they were going to enact & enforce come hell or high water, sensible or not, whether it achieved what they
hoped it would or not.
| Quote: | | Originally posted by wessongroupAs for turning people in for not filing.. who is developing this data?.. if it is coming from a Bank, CPA or
any others with fiduciary responsibility, would appear they would be opening them selves up to law suits ... by releasing this information without
knowledge and authorization of the Mexican Fideicomiso related to the subject site in question |
I read somewhere in all those URL's posted by the CPA/Tax Specialist gurus last year that there is currently an agreement in place for Mexico to
electronically pass information from Mexican banks to the IRS. An agreement being in place & an agreement being actively utilized are two totally
different issues.
I personally was not willing to risk becoming the Test Case IRS Poster Child!
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Pompano
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I don't trust the IRS much...and the bank trust? NOT AT ALL.
I do what the voices in my tackle box tell me.
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longlegsinlapaz
Super Nomad
Posts: 1685
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Location: La Paz
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| Quote: | Originally posted by Pompano
I don't trust the IRS much...and the bank trust? NOT AT ALL. |
Thank you for justifying my actions!
P.S. What do the voices in your tackle box say when you whisper "IRS" into it?
[Edited on 8-30-2010 by longlegsinlapaz]
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SDRonni
Nomad
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Location: Serra Mesa/Rosarito
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Longlegs, check your U2U.....
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wessongroup
Platinum Nomad
Posts: 21152
Registered: 8-9-2009
Location: Mission Viejo
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Mood: Suicide Hot line ... please hold
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Would only offer.. is Mexican Fideicomiso a working definition in current IRS Code...
Just did a search on the IRS site .. using "Mexican Fideicomiso" and got zero results... got 93 using "Fideicomiso", however the results are in
spanish, but, would not appear to be dealing with home owners and paying taxes in Mexico
I have not reviewed all 93 just the first couple of pages...
Think the stumbling point is the working definition of Mexican Fideicomiso and Trust.. they are not the same.... they are being used as
interchangeable, however I do not believe they are ...
I am not telling anyone what to do.. rather offering a different "view" on the issue... based on what experience and knowledge I have with Trust,
Banking and the IRS.. (and I have too have been audited and have paid fines)
I however will not move on the filing of documents with the IRS, unless I can find the exact requirement in current Law and regulations ... not
policy, not interpretations and not guidelines.. they are not enforceable ...
Legal definitions used in specific parts of the Law are...
In the case which raised this issue again, it was a "Company" operating in Mexico and was buying and selling real estate.. the complete specific's of
the treatment of "sales" of "property" of a Company and/or and Individual may also impact the movement on the part of the IRS..
As for me.. the IRS audited me twice, not what "seems like every year"..
Also, we do not know the "status" of the Company, was it a LLC, LLP, etc ... many other factors would add to the equation
I would be hesitant to draw any conclusions based on this individuals cases, at this time..
Hope it helps... I know that no one is trying to "not pay" their taxes.. as you all are filing each year... just not clear that you should be filing
as having a "Foreign Trust" as defined in the IRS Code... at this time.
Just looked up what the IRS suggests as language for a "Trust"...
http://preview.tinyurl.com/26m8pk3
One can draw their own conclusions if a Mexican Fideicomiso, is a true Trust as outlined here by the IRS .. one issue, that I noted, with a trust
requirements as set forth by the IRS .. there is no time limit set on a Trust ... with the Mexican Fideicomiso there is.. and that the renewal is
conditional on review.. that is NOT a requirement of a Trust...
As I do not have a Mexican Fideicomiso I cannot review for consistency with IRS requirements..
Have fun... but, I do not after a brief review that a Mexican Fideicomiso, is the same as a Trust which the IRS is talking about.
Would they like to have all your information on everything you do, of course, they are the Government, that is their job.. but, they are also employed
by you, as you pay their salary... just a thought..
[Edited on 8-30-2010 by wessongroup]
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longlegsinlapaz
Super Nomad
Posts: 1685
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Location: La Paz
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Wessongroup, I'm doing all this from memory.....I'm not digging my paperwork out, but I seem to recall that the IRS officially referred to it as a
MRT....Mexico/Mexican Resident Trust.
See: http://fideicomiso.wordpress.com/
As a renter, you have it MUCH easier!!!
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k-rico
Super Nomad
Posts: 2079
Registered: 7-10-2008
Location: Playas de Tijuana
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This guy will do the work for you if you decide to file. I hired him last year to get me caught up and he did a great job for me.
http://dillingercpa.com/index.htm
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longlegsinlapaz
Super Nomad
Posts: 1685
Registered: 11-18-2005
Location: La Paz
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| Quote: | Originally posted by k-rico
This guy will do the work for you if you decide to file. I hired him last year to get me caught up and he did a great job for me.
http://dillingercpa.com/index.htm |
....and the approximate cost was....??
I got a quote from a local tax specialist in this area for something like $250 per form per tax year....I had to submit 2003-2008, two forms each for
each of those years....more than my monthly retirement income!
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k-rico
Super Nomad
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Location: Playas de Tijuana
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It's probably best to contact him for a price to do the work. He did 4 years worth of amended returns for me and it cost MUCH, MUCH, MUCH less than
$250 per form you were quoted. Way less.
Good guy, easy to work with, always answered his phone/email or got back to me promptly. Everything went smoothly.
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wessongroup
Platinum Nomad
Posts: 21152
Registered: 8-9-2009
Location: Mission Viejo
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Mood: Suicide Hot line ... please hold
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Didn't like his smile
| Quote: | Originally posted by longlegsinlapaz
Wessongroup, I'm doing all this from memory.....I'm not digging my paperwork out, but I seem to recall that the IRS officially referred to it as a
MRT....Mexico/Mexican Resident Trust.
See: http://fideicomiso.wordpress.com/
As a renter, you have it MUCH easier!!! |
Yes, it more than any normal person could retain, and is what is counted on by many.. and of course your correct... renting is much easier to deal
with, from many aspects..
As stated in the header.. the guy is probably a nice fella.. but....
So I went back and dug out the Law:
PART IV--PROVISIONS RELATED TO FOREIGN TRUSTS
SEC. 531. CLARIFICATIONS WITH RESPECT TO FOREIGN TRUSTS WHICH ARE TREATED AS HAVING A UNITED STATES BENEFICIARY.
(a) In General- Paragraph (1) of section 679(c) is amended by adding at the end the following:
‘For purposes of subparagraph (A), an amount shall be treated as accumulated for the benefit of a United States person even if the United States
person’s interest in the trust is contingent on a future event.’.
(b) Clarification Regarding Discretion To Identify Beneficiaries- Subsection (c) of section 679 is amended by adding at the end the following new
paragraph:
‘(4) SPECIAL RULE IN CASE OF DISCRETION TO IDENTIFY BENEFICIARIES- For purposes of paragraph (1)(A), if any person has the discretion (by authority
given in the trust agreement, by power of appointment, or otherwise) of making a distribution from the trust to, or for the benefit of, any person,
such trust shall be treated as having a beneficiary who is a United States person unless--
‘(A) the terms of the trust specifically identify the class of persons to whom such distributions may be made, and
‘(B) none of those persons are United States persons during the taxable year.’.
(c) Clarification That Certain Agreements and Understandings Are Terms of the Trust- Subsection (c) of section 679, as amended by subsection (b), is
amended by adding at the end the following new paragraph:
‘(5) CERTAIN AGREEMENTS AND UNDERSTANDINGS TREATED AS TERMS OF THE TRUST- For purposes of paragraph (1)(A), if any United States person who directly
or indirectly transfers property to the trust is directly or indirectly involved in any agreement or understanding (whether written, oral, or
otherwise) that may result in the income or corpus of the trust being paid or accumulated to or for the benefit of a United States person, such
agreement or understanding shall be treated as a term of the trust.’.
SEC. 532. PRESUMPTION THAT FOREIGN TRUST HAS UNITED STATES BENEFICIARY.
(a) In General- Section 679 is amended by redesignating subsection (d) as subsection (e) and inserting after subsection (c) the following new
subsection:
‘(d) Presumption That Foreign Trust Has United States Beneficiary- If a United States person directly or indirectly transfers property to a foreign
trust (other than a trust described in section 6048(a)(3)(B)(ii)), the Secretary may treat such trust as having a United States beneficiary for
purposes of applying this section to such transfer unless such person--
‘(1) submits such information to the Secretary as the Secretary may require with respect to such transfer, and
‘(2) demonstrates to the satisfaction of the Secretary that such trust satisfies the requirements of subparagraphs (A) and (B) of subsection (c)(1).’.
(b) Effective Date- The amendments made by this section shall apply to transfers of property after the date of the enactment of this Act.
SEC. 533. UNCOMPENSATED USE OF TRUST PROPERTY.
(a) In General- Paragraph (1) of section 643(i) is amended--
(1) by striking ‘directly or indirectly to’ and inserting ‘(or permits the use of any other trust property) directly or indirectly to or by’, and
(2) by inserting ‘(or the fair market value of the use of such property)’ after ‘the amount of such loan’.
(b) Exception for Compensated Use- Paragraph (2) of section 643(i) is amended by adding at the end the following new subparagraph:
‘(E) EXCEPTION FOR COMPENSATED USE OF PROPERTY- In the case of the use of any trust property other than a loan of cash or marketable securities,
paragraph (1) shall not apply to the extent that the trust is paid the fair market value of such use within a reasonable period of time of such use.’.
(c) Application to Grantor Trusts- Subsection (c) of section 679, as amended by this Act, is amended by adding at the end the following new paragraph:
‘(6) UNCOMPENSATED USE OF TRUST PROPERTY TREATED AS A PAYMENT- For purposes of this subsection, a loan of cash or marketable securities (or the use of
any other trust property) directly or indirectly to or by any United States person (whether or not a beneficiary under the terms of the trust) shall
be treated as paid or accumulated for the benefit of a United States person. The preceding sentence shall not apply to the extent that the United
States person repays the loan at a market rate of interest (or pays the fair market value of the use of such property) within a reasonable period of
time.’.
(d) Conforming Amendments- Paragraph (3) of section 643(i) is amended--
(1) by inserting ‘(or use of property)’ after ‘If any loan’,
(2) by inserting ‘or the return of such property’ before ‘shall be disregarded’, and
(3) by striking ‘REGARDING LOAN PRINCIPAL’ in the heading thereof.
(e) Effective Date- The amendments made by this section shall apply to loans made, and uses of property, after the date of the enactment of this Act.
SEC. 534. REPORTING REQUIREMENT OF UNITED STATES OWNERS OF FOREIGN TRUSTS.
(a) In General- Paragraph (1) of section 6048(b) is amended by inserting ‘shall submit such information as the Secretary may prescribe with respect to
such trust for such year and’ before ‘shall be responsible to ensure’.
(b) Effective Date- The amendment made by this section shall apply to taxable years beginning after the date of the enactment of this Act.
SEC. 535. MINIMUM PENALTY WITH RESPECT TO FAILURE TO REPORT ON CERTAIN FOREIGN TRUSTS.
(a) In General- Subsection (a) of section 6677 is amended--
(1) by inserting ‘the greater of $10,000 or’ before ‘35 percent’, and
(2) by striking the last sentence and inserting the following: ‘At such time as the gross reportable amount with respect to any failure can be
determined by the Secretary, any subsequent penalty imposed under this subsection with respect to such failure shall be reduced as necessary to assure
that the aggregate amount of such penalties do not exceed the gross reportable amount (and to the extent that such aggregate amount already exceeds
the gross reportable amount the Secretary shall refund such excess to the taxpayer).’
(b) Effective Date- The amendments made by this section shall apply to notices and returns required to be filed after December 31, 2009.
Take a read.. I don't find what this fella is talking about written in the law... and again... YOU don't own it... the BANK does.. as you can't OWN
property technically in the Federal Zone... you can stay in your home for 50 years ... oh, my... and then you may or may not get a renewal for another
50 years.. that is how it reads.. currently...
Not trying to tell anyone anything.. rather only bring up another read on this subject as did the other poster... who indicated they were a retired
from the Industry and appeared by what they posted to be qualified to make a point...
Hope it helps.. will keep looking.. as I could not find anything at the IRS, under a search using Mexican Residential Trust .. as I don't think there
is such a thing... it is language which has evolved over a period of time to this current concept of what a Mexican Fideicomiso ..
And nothing against the guy personally, but that is the way they make money... used to do the same thing.. with Regulatory requirements for Busniess
"handling" hazardous.... from production to disposal and all parts in between... folks are always looking to keep on the straight and narrow.. and any
new law is an opening to cause concern and/or many questions to effected or potentally effected parties... and some use this as a means to draw
business ... just the way it works...
Will add one last thing.. most of the "language" associated with this topic on the IRS site, falls into the category of Business: LLC, LLP, and
Trust.. (income producing Trusts) don't think that is you or most any of the others with Fido's... maybe wrong but don't think so... and that was the
focus and intent of the legislation... ya might want to consider that in your evaluation of all this truly fun stuff...
Think if your running a Business down here.. like a LLC, LLP or create a Trust with Bancomer (or who ever) and make money off of same.. then you
should be filling out the forms.. with just the purchase of a place to live within a "Zone" which the Mexican Government setup so ya can... nope can't
see it... but, as you pointed out, I rent.. but, IF I did have a Fido.. and a place.. I would not file.. as I have already run it on how it works with
an LLC down here.. and I would not.. and I already know there will be some who say NO !!!.. macht nichts that's what makes it go around...
Thats it for me... done my good deed for the day... have fun
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Juan del Rio
Senior Nomad
Posts: 560
Registered: 6-8-2004
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From my friend who is having the issue with the IRS:
"Please let the Baja Nomads that they have been a huge help on this. We have a small family business in St. Louis, Mo. It was us when the IRS asked
where I lived and I told them in Baja Sur, Mexico that opened the can of worms. We are in the process of trying to get the IRS agents to understand
and to be reasonable. This has taken a lot of time, money and resolves to make the IRS understand. Any additional information that Baja Nomads can
offer up would be appreciated. Thanks again to all of them!"
I guess the information everyone has supplied has been really helpful to my friend. I will keep you updated as to the outcome of all this. It seems
that many of us could be in the same situation in the future.
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wessongroup
Platinum Nomad
Posts: 21152
Registered: 8-9-2009
Location: Mission Viejo
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Hope it does... good luck breaking trail ....
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Dave
Elite Nomad
Posts: 6005
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The IRS 'smell' test
According to treasury regulations:
1. A U.S. court must be able to exercise primary supervision over the trust’s administration.
2. One or more U.S. citizens must have the authority to control all substantial decisions of the trust.
If it fails either test it is considered a foreign trust and the appropriate forms must be filed.
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wessongroup
Platinum Nomad
Posts: 21152
Registered: 8-9-2009
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Mood: Suicide Hot line ... please hold
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That assumes that a Fido is in fact a trust...
Suggested Language for Trusts (per Publication 557)
The _____ Charitable Trust. Declaration of Trust made as of the ___ day of ____, 20__, by _____, of ____, and ____, of ____, who hereby declare and
agree that they have received this day from _____, as Donor, the sum of Ten Dollars ($10) and that they will hold and manage the same, and any
additions to it, in trust, as follows:
First: This trust shall be called "The _____ Charitable Trust."
Second: The trustees may receive and accept property, whether real, personal, or mixed, by way of gift, bequest, or devise, from any person, firm,
trust, or corporation, to be held, administered, and disposed of in accordance with and pursuant to the provisions of this Declaration of Trust; but
no gift, bequest or devise of any such property shall be received and accepted if it is conditioned or limited in such manner as to require the
disposition of the income or its principal to any person or organization other than a "charitable organization" or for other than "charitable
purposes" within the meaning of such terms as defined in Article Third of this Declaration of Trust, or as shall in the opinion of the trustees,
jeopardize the federal income tax exemption of this trust pursuant to section 501(c)(3) of the Internal Revenue Code, or the corresponding section of
any future federal tax code.
Third: A. The principal and income of all property received and accepted by the trustees to be administered under this Declaration of Trust shall be
held in trust by them, and the trustees may make payments or distributions from income or principal, or both, to or for the use of such charitable
organizations, within the meaning of that term as defined in paragraph C, in such amounts and for such charitable purposes of the trust as the
trustees shall from time to time select and determine; and the trustees may make payments or distributions from income or principal, or both, directly
for such charitable purposes, within the meaning of that term as defined in paragraph D, in such amounts as the trustees shall from time to time
select and determine without making use of any other charitable organization. The trustees may also make payments or distributions of all or any part
of the income or principal to states, territories, or possessions of the United States, any political subdivision of any of the foregoing, or to the
United States or the District of Columbia but only for charitable purposes within the meaning of that term as defined in paragraph D. Income or
principal derived from contributions by corporations shall be distributed by the trustees for use solely within the United States or its possessions.
No part of the net earnings of this trust shall inure or be payable to or for the benefit of any private shareholder or individual, and no substantial
part of the activities of this trust shall be the carrying on of propaganda, or otherwise attempting, to influence legislation. No part of the
activities of this trust shall be the participation in, or intervention in (including the publishing or distributing of statements), any political
campaign on behalf of or in opposition to any candidate for public office.
B. The trust shall continue forever unless the trustees terminate it and distribute all of the principal and income, which action may be taken by the
trustees in their discretion at any time. On such termination, assets shall be distributed for one or more exempt purposes within the meaning of
section 501(c)(3) of the Internal Revenue Code, or the corresponding section of any future federal tax code, or shall be distributed to the federal
government, or to a state or local government, for a public purpose. The donor authorizes and empowers the trustees to form and organize a nonprofit
corporation limited to the uses and purposes provided for in this Declaration of Trust, such corporation to be organized under the laws of any state
or under the laws of the United States as may be determined by the trustees; such corporation when organized to have power to administer and control
the affairs and property and to carry out the uses, objects, and purposes of this trust. Upon the creation and organization of such corporation, the
trustees are authorized and empowered to convey, transfer, and deliver to such corporation all the property and assets to which this trust may be or
become entitled. The charter, bylaws, and other provisions for the organization and management of such corporation and its affairs and property shall
be such as the trustees shall determine, consistent with the provisions of this paragraph.
C. In this Declaration of Trust and in any amendments to it, references to "charitable organizations" or "charitable organization" mean corporations,
trusts, funds, foundations, or community chests created or organized in the United States or in any of its possessions, whether under the laws of the
United States, any state or territory, the District of Columbia, or any possession of the United States, organized and operated exclusively for
charitable purposes, no part of the net earnings of which inures or is payable to or for the benefit of any private shareholder or individual, and no
substantial part of the activities of which is carrying on propaganda, or otherwise attempting, to influence legislation, and which do not participate
in or intervene in (including the publishing or distributing of statements), any political campaign on behalf of or in opposition to any candidate for
public office. It is intended that the organization described in this paragraph C shall be entitled to exemption from federal income tax under section
501(c)(3) of the Internal Revenue Code, or the corresponding section of any future federal tax code.
D. In this Declaration of Trust and in any amendments to it, the term "charitable purposes" shall be limited to and shall include only religious,
charitable, scientific, literary, or educational purposes within the meaning of those terms as used in section 501(c)(3) of the Internal Revenue Code,
or the corresponding section of any future federal tax code, but only such purposes as also constitute public charitable purposes under the law of
trusts of the State of _____.
Fourth: This Declaration of Trust may be amended at any time or times by written instrument or instruments signed and sealed by the trustees, and
acknowledged by any of the trustees, provided that no amendment shall authorize the trustees to conduct the affairs of this trust in any manner or for
any purpose contrary to the provisions of section 501(c)(3) of the Internal Revenue Code, or the corresponding section of any future federal tax code.
An amendment of the provisions of this Article Fourth (or any amendment to it) shall be valid only if and to the extent that such amendment further
restricts the trustees' amending power. All instruments amending this Declaration of Trust shall be noted upon or kept attached to the executed
original of this Declaration of Trust held by the trustees.
Fifth: Any trustee under this Declaration of Trust may, by written instrument, signed and acknowledged, resign his office. The number of trustees
shall be at all times not less than two, and whenever for any reason the number is reduced to one, there shall be, and at any other time there may be,
appointed one or more additional trustees. Appointments shall be made by the trustee or trustees for the time in office by written instruments signed
and acknowledged. Any succeeding or additional trustee shall, upon his acceptance of the office by written instrument signed and acknowledged, have
the same powers, rights and duties, and the same title to the trust estate jointly with the surviving or remaining trustee or trustees as if
originally appointed.
None of the trustees shall be required to furnish any bond or surety. None of them shall be responsible or liable for the acts of omissions of any
other of the trustees or of any predecessor or of a custodian, agent, depositary or counsel selected with reasonable care.
The one or more trustees, whether original or successor, for the time being in office, shall have full authority to act even though one or more
vacancies may exist. A trustee may, by appropriate written instrument, delegate all or any part of his powers to another or others of the trustees for
such periods and subject to such conditions as such delegating trustee may determine.
The trustees serving under this Declaration of Trust are authorized to pay to themselves amounts for reasonable expenses incurred and reasonable
compensation for services rendered in the administration of this trust, but in no event shall any trustee who has made a contribution to this trust
ever receive any compensation thereafter.
Sixth: In extension and not in limitation of the common law and statutory powers of trustees and other powers granted in this Declaration of Trust,
the trustees shall have the following discretionary powers:
a) To invest and reinvest the principal and income of the trust in such property, real, personal, or mixed, and in such manner as they shall deem
proper, and from time to time to change investments as they shall deem advisable; to invest in or retain any stocks, shares, bonds, notes,
obligations, or personal or real property (including without limitation any interests in or obligations of any corporation, association, business
trust, investment trust, common trust fund, or investment company) although some or all of the property so acquired or retained is of a kind or size
which but for this express authority would not be considered proper and although all of the trust funds are invested in the securities of one company.
No principal or income, however, shall be loaned, directly or indirectly, to any trustee or to anyone else, corporate or otherwise, who has at any
time made a contribution to this trust, nor to anyone except on the basis of an adequate interest charge and with adequate security.
b) To sell, lease, or exchange any personal, mixed, or real property, at public auction or by private contract, for such consideration and on such
terms as to credit or otherwise, and to make such contracts and enter into such undertakings relating to the trust property, as they consider
advisable, whether or not such leases or contracts may extend beyond the duration of the trust.
c) To borrow money for such periods, at such rates of interest, and upon such terms as the trustees consider advisable, and as security for such loans
to mortgage or pledge any real or personal property with or without power of sale; to acquire or hold any real or personal property, subject to any
mortgage or pledge on or of property acquired or held by this trust.
d) To execute and deliver deeds, assignments, transfers, mortgages, pledges, leases, covenants, contracts, promissory notes, releases, and other
instruments, sealed or unsealed, incident to any transaction in which they engage.
e) To vote, to give proxies, to participate in the reorganization, merger or consolidation of any concern, or in the sale, lease, disposition, or
distribution of its assets; to join with other security holders in acting through a committee, depositary, voting trustees, or otherwise, and in this
connection to delegate authority to such committee, depositary, or trustees and to deposit securities with them or transfer securities to them; to pay
assessments levied on securities or to exercise subscription rights in respect of securities.
f) To employ a bank or trust company as custodian of any funds or securities and to delegate to it such powers as they deem appropriate; to hold trust
property without indication of fiduciary capacity but only in the name of a registered nominee, provided the trust property is at all times identified
as such on the books of the trust; to keep any or all of the trust property or funds in any place or places in the United States of America; to employ
clerks, accountants, investment counsel, investment agents, and any special services, and to pay the reasonable compensation and expenses of all such
services in addition to the compensation of the trustees.
Seventh: The trustees' powers are exercisable solely in the fiduciary capacity consistent with and in furtherance of the charitable purposes of this
trust as specified in Article Third and not otherwise.
Eighth: In this Declaration of Trust and in any amendment to it, references to "trustees" mean the one or more trustees, whether original or
successor, for the time being in office.
Ninth: Any person may rely on a copy, certified by a notary public, of the executed original of this Declaration of Trust held by the trustees, and of
any of the notations on it and writings attached to it, as fully as he might rely on the original documents themselves. Any such person may rely fully
on any statements of fact certified by anyone who appears from such original documents or from such certified copy to be a trustee under this
Declaration of Trust. No one dealing with the trustees need inquire concerning the validity of anything the trustees purport to do. No one dealing
with the trustees need see to the application of anything paid or transferred to or upon the order of the trustees of the trust.
Tenth: This Declaration of Trust is to be governed in all respects by the laws of the State of _____.
Trustee --
Trustee --
Continue
Is that what your Fido looks like?
[Edited on 8-31-2010 by wessongroup]
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Juan del Rio
Senior Nomad
Posts: 560
Registered: 6-8-2004
Member Is Offline
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...it goes on:
...and just gets worse. From my friend who is being audited by the IRS:
"The IRS has concluded I should have filed Form 3520 and 3520A in subsequent years. The fine is going to be very costly. I now have to borrow money to
hire attorney and on it goes....
Thanks so much to Baja Nomads who have been a lot of help."
This is the first time I have heard of anyone having trouble with the IRS and a Fidecomiso. Has anyone else experienced this with the them or is the
first one?
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k-rico
Super Nomad
Posts: 2079
Registered: 7-10-2008
Location: Playas de Tijuana
Member Is Offline
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Let us know what the outcome of the legal battle is.
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Juan del Rio
Senior Nomad
Posts: 560
Registered: 6-8-2004
Member Is Offline
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Thanks
The information on the forum has been extremely helpful. I will keep Baja Nomads informed as to what happens as this may have an impact on many of the
members. We really appreciate all the help that has been presented here!
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