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bajajazz
Nomad
Posts: 386
Registered: 12-18-2006
Location: La Paz, BCS, Mexico
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WHY FIGHT IT?
Why fight it?
Because . . . creating a paper trail where none existed before is just begging to be hit up with demands for more paper . . . and more paper . . . and
more paper . . . until your socalled "golden years" are spent doing nothing other than filling out forms and answering questions that are nobody's
gddm business except your own. Paper generates paper. Answer enough of their nonsensical bureaucratic claptrap questions and sooner or later you're
going to stick your head in a noose.
I checked this out with the trust officer at BaNorte . . . he agrees it's inapplicable nonsense and should be ignored.
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k-rico
Super Nomad
Posts: 2079
Registered: 7-10-2008
Location: Playas de Tijuana
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| Quote: | Originally posted by wessongroup
k-rico... see above |
Hey, you're right!! It doesn't make any sense to file these forms. I agree. BUT, we know of one individual fighting this now, he has said it is
costing him big bucks, and we know of another individual who had to hire an attorney who had to get IRS officials in DC to tell a local agent to back
off on another case.
You're right, it doesn't make sense. It's easy for you to argue against filing, you don't have a fideicomiso.
I AGREE WITH YOU - OK?
But I'm still going to file the forms - just in case. The penalties are stiff, as are CPA/lawyer fees.
And if the IRS rules that fideicomisos are not foreign trusts I'll be expecting a "neener, neener, neener, I told you so" from you. 
[Edited on 9-21-2010 by k-rico]
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k-rico
Super Nomad
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Location: Playas de Tijuana
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bajajazz, you asked a Mexican banker about IRS laws and you would act upon his advice???????
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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
I believe a very, very import piece of information is found at the very top and clearly shows that this in fact does not apply to Americans when it
comes to tax reporting on a Forgein Trust
The Form applies to "Annual Information Return of Foreign Trust With a U.S. Owner
Who owns the Trust in Mexico, as it would appear that a U.S. person should not be considered the owner of the fideicomiso under IRC Section 679
Based on this point, one would not have to file the form based on the Forms Definition of who it applies too... owner of a Foreign Trust With a U.S.
Owner
As the bank becomes the legal owner of the property for the exclusive use of the buyer/beneficiary.
Now maybe that will make a bit more sense.... 
[Edited on 9-20-2010 by wessongroup] |
I might follow your logic IF the bank was the named
owner of the fideicomiso document, however, that's not the case....each & everyone of my fideicomisos have duly reflected "Longlegs In LaPaz" as
the document owner....and it's inheritable by my chosen beneficiaries, not the banks....I can sell it, but the bank can't. 
Other than a cross-border reporting agreement which may or may not be complied with & which could be rescinded at any time, my name is the only
name on the document that the IRS has any power over. Mexican banks cannot be expected to file US tax documents & even if they could, the net
result to my taxable income would still be $0.00.
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longlegsinlapaz
Super Nomad
Posts: 1685
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Location: La Paz
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What k-rico said!!! The threat of the fines & penalties is outside the scope of my financial abilities.
I also agree with "bajajazz, you asked a Mexican banker about IRS laws and you would act upon his advice???????" But mostly because I
personally know that bank individual! 
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dtbushpilot
Ultra Nomad
Posts: 3294
Registered: 1-11-2007
Location: Buena Vista BCS
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Mood: Tranquilo
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If you got a new fideicomiso in 2009 when is the filing deadline for the forms? I seem to remember one of them being earlier than the other..
"Life is tough".....It's even tougher if you're stupid.....
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maspacifico
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Posts: 317
Registered: 4-22-2008
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After looking at this thing for over a year now...I looked at filing myself and found that even though I am retired I don't have time for that kind of
nonsense. I then remembered where all this is coming from, the Gringo Gazoot..... The guy is advertising there. Along with the South Dakota
registration guy and the perpetual motion electricity saver guy. They advertise and they get an article. I don't have any income from my fideo's and
neither do most of you. I am more than willing to pay my fair share of taxes on nothing, but I don't want to pay someone to file a bunch of needless
forms.
That's why I make four copies of utility bills when I renew my FM2!!
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longlegsinlapaz
Super Nomad
Posts: 1685
Registered: 11-18-2005
Location: La Paz
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| Quote: | Originally posted by dtbushpilot
If you got a new fideicomiso in 2009 when is the filing deadline for the forms? I seem to remember one of them being earlier than the other..
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Filing cutoff is April 15th for the reportable tax year. This is not one of the oddball date forms, it goes
with your 1040.
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oxxo
Banned
Posts: 2347
Registered: 5-17-2006
Location: Wherever I am, I'm there
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Mood: If I was feeling any better, I'd be twins!
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I talked to both my attorney and my accountant about these forms a couple of years ago. They both recommended that I file them. They both agree
that the law is ambiguous. However, my accountant says it takes him 5 minutes to fill out the form and he doesn't charge me anything to do it. He
said, let someone else with deep pockets fight the thing and get a ruling. Until then it costs me nothing to comply.
My accountant says that the IRS may indeed be interested in fideicomiso data because they want to get their share of any capital gains taxes when and
if a property is sold. Please don't shoot me or my accountant, but I can see some political rants coming. Before I purchased my property in Mexico,
my accountant told me that I would have to pay capital gain taxes in the US (as a US citizen) when the property is sold. I will get a credit toward
my tax due based on the amount of Mexican capital gains taxes I pay. If the Mexican capital gains taxes is greater than or equal to my US capital
gains tax, then I will owe nothing in the US. I went into this with eyes wide open.
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bajajazz
Nomad
Posts: 386
Registered: 12-18-2006
Location: La Paz, BCS, Mexico
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The IRS is interested in one thing and one thing only, the reporting of income. The function of a Fideicomiso is not that of an investment vehicle.
Choosing to spend one's retirement years in a house in Mexico under the terms of a Fideicomiso is not an income-producing event.
The IRS is intentionally understaffed. The percentage of returns they audit is ludicrously low. Burying the bureau's agents under reams of
unsolicited, unwanted and unnecessary paperwork is counterproductive to their mission.
And yes, I have followed the advice of my bank's trust officer since 1987, he's never burned me yet, and I have a lot more confidence in him than I do
with the professional purveyors of rancid crap who publish their scare stories in the Gringo Gazette.
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oxxo
Banned
Posts: 2347
Registered: 5-17-2006
Location: Wherever I am, I'm there
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Mood: If I was feeling any better, I'd be twins!
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| Quote: | Originally posted by bajajazz
The IRS is interested in one thing and one thing only, the reporting of income. The function of a Fideicomiso is not that of an investment vehicle.
Choosing to spend one's retirement years in a house in Mexico under the terms of a Fideicomiso is not an income-producing event.
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It could be (it hopefully is) if you make a profit when you sell your house. Any foreign income is a taxable event (possibly subject to taxes) in the
eyes of the IRS.
Also, I know a number of people who own property in Mexico and rent it either part time or full time. The income is "under the table" and not
reported in either Mexico or the US. I imagine that form 3520 is an effort by the IRS to put a stop to this practice.
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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
k-rico... see above |
Hey, you're right!! It doesn't make any sense to file these forms. I agree. BUT, we know of one individual fighting this now, he has said it is
costing him big bucks, and we know of another individual who had to hire an attorney who had to get IRS officials in DC to tell a local agent to back
off on another case.
You're right, it doesn't make sense. It's easy for you to argue against filing, you don't have a fideicomiso.
I AGREE WITH YOU - OK?
But I'm still going to file the forms - just in case. The penalties are stiff, as are CPA/lawyer fees.
And if the IRS rules that fideicomisos are not foreign trusts I'll be expecting a "neener, neener, neener, I told you so" from you.
[Edited on 9-21-2010 by k-rico] |
No way... like I said.. was just trying to help in my own way...
Will, just add this in as I was reading some others posts on the issues this morning with my coffee.. after this post.. I'm going looking for Russ's
pictures.. and how he is doing with Bubba's new attachment to launch his boat.. and see where Pomp.. is this morning... with his super travelog.. I
get to go a lot of places with that guy.. really super...
"As the bank becomes the legal owner of the property for the exclusive use of the buyer/beneficiary" you are not the owner of the property.
And the "description used for a document"... has no direct impact nor relevance with Trust law.. one could call the instrument.. Bajabutt,
Wessongroup, Dancing with Wolves, the Terminator (the Bank I worked for City National was called the bank of the stars, and those names were the real
names on Trust Documents create for real estate transactions for the people you associate with those movies (among others) and all property involved
in a real estate transactions, (commercial or SFR were put into Trusts) the name of the Trust .. does not change the Law which the document are based
on... with the law, in Mexico .. one does not own the property.. rather it is owned by the Bank and by means of a legal document, created by
legislation in Mexico not the United States, which satisfies Mexican Law.. which allows you as a Foreign to live in the Federal Zone on property for
50 years, with renewal.... with other bells and whistles to encourage foreigners to invest in Mexican Real Estate for the development of the Mexican
economy in Baja.. and is the primary reason the Baja real estate is really in the crapper about now.. no tourists, and no movement in Real Estate...
the inventory continues to build, Fido or no...
In this case, the ability of a someone to live on a property in the Federal Zone, allowed through the legislation, with other conditions which must
also be taken under consideration that relate to Mexico's Constitution giving the government control of land and the transfer of ownership rights of
same.
On capital gains.. there are means around that issue also... just saying ......
And it does not really surprise me that CPA's and Lawyers.. would tell you to just fill them out... as they would incur liability in the event it went
south, it's called CYA and the carry E&O Insurance for same...
I am not telling anyone what to do... rather, I did my own looking just about a year ago at this time.. and Legs helped me greatly in my own "due
diligence" process on this topic among many others, as she always has her s**t wrapped tight... A very savvy Lady... and one who's opinion I respect
in many areas .. and I don't mean to imply is incorrect rather perhaps some of the interpretation which have come down the line over the past 3-5
years may have been a bit colored and may need to be re-examined with a new "view".
Used to do Regulatory Affairs for Company's and had a business also doing same ... When a Law is past.. it takes at least 3-5 years to even get
started on true implementation .. then there will be changes in Regulations to get the Law fine tuned.. based on a multitude of factors which will
come up... like this..
As I think all know this Law was in fact going after the folks that were moving huge amounts of "loot" from the United States to other Countries by
various means.. think the folks down in Baja living in retirement.. is a long way from the intent of the law which was passed... it just has to be
broken out from the thinking of some that if falls under the United States attempt to get folks trying to CHEAT!! with moving assets offshore into
Foreign Trusts to avoid paying taxes... not anyone I know hear... buy a long shot..
Its just never as direct as it would appear, with any Law and or Regulation from Fed's to States to Counties.. if so we would be living in a different
place..
I don't like Government controlling our lives.. worked in it all my working days.. and have found it is always how the question is asked...
In this case, the question to be asked, does the Mexican Bank become the legal own the property, under current Mexican law ..... it does.. it is the
law.. you can not own property in the Federal Zone... also Mexico's Constitution gives the government control of land and the transfer of ownership
rights.. this is a long ways from a Trust which one owns in the United States..
Now go from there....
A really good thread, and to me it's no different that picking up a family who's car broke down on the way from Ensenada to Rosarito and I told them
all to get into my Crow Vic and I took them to their house.. so they got home with the little baby and three small children and were able to get their
friends and go back down and get their car.. .
All can read the law and regulations... and get a little insight from some who have worked with Government to derive favorable interpretations on Law
and regulations governing various issues.. and perhaps see and/or hear something that helps them in their decision making on this an other issues...
It all helps...
[Edited on 9-21-2010 by wessongroup]
[Edited on 9-21-2010 by wessongroup]
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