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Author: Subject: For US tax payers..re: Fideicomisos
BajaGringo
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[*] posted on 8-18-2009 at 03:04 PM


Quote:
Originally posted by slimshady
Loopholes exist and we will take care of them.


Do you mean take "advantage" of them???

:?:




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oldlady
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[*] posted on 8-18-2009 at 03:18 PM


I can't imagine any of you not following the spirit and intent of the law.
But given the complexity of the tax codes and the difficulties of their interpretations I am also sure that you would not do anything on a universally accessible forum that could be interpreted as confession to a sin of omission.
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[*] posted on 8-18-2009 at 03:29 PM


Advantage, thanks. Since the tax code is vague on the subject, and that's how they (the feds) like it. They will never really give you a straight answer. So why comply on something that is vague.



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[*] posted on 8-19-2009 at 02:56 PM


I'm getting ready to prepare (or have prepared) Form 3520.

Here are some pertinent links. I have not found a single opinion by any CPA / tax attorney / specialist that says that Fideicomiso beneficiaries do not need to file form 3520. Every opinion I've read by tax specialists says that it should be filed.

This is probably the truth of the matter:

"Amy Jetel, who works with high-net-worth clients discuss the fact that she has to decide how to advise her clients on how the fideicomiso should be taxed and reported under U.S. tax law. The Internal Revenue Service’s representatives with whom her firm has spoken acknowledge that fideicomisos are not the types of tax-avoidance structures that are targeted for U.S. reporting requirements for foreign trusts. Nonetheless, because IRS agents also admit that the service has no idea what a fideicomiso really is, they recommend that foreign-trust reporting be done, just to be safe."

Has anybody here plowed their way this 6 page form with 12 pages of instructions?

I've spoken to one tax attorney so far that wants $7,000 to $10,000 to file the form. Yikes! I'm shocked.

Good info on the 23 Sep deadline - http://foreignbankaccountamnesty.com/


http://fideicomiso.wordpress.com/2009/08/16/it%e2%80%99s-dar...


http://us-mexicantax.blogspot.com/2009/02/us-tax-return-fili...


http://www.mexicorealestateinvestment.org/the-irs-wants-to-k...

http://www.emeraldcoastinvest.com/Investment/OverseasInvesti...

http://subscribers.trustsandestates.com/plus/international_l...
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[*] posted on 8-19-2009 at 05:17 PM


Quote:
Originally posted by morgaine7
Quote:
Originally posted by k-rico
Every opinion I've read by tax specialists says that it should be filed.
[...]
I've spoken to one tax attorney so far that wants $7,000 to $10,000 to file the form. Yikes! I'm shocked.

OK, I've been bursting to say this, and now I gotta. Has it occurred to anyone else that these professionals who are dead certain that the labyrinthine trust reporting requirements apply to us ... and who are blasting the message all over the internet, kindhearted souls that they are .... stand to profit bigtime from scaring the bejesus out of us?

I'm not saying they're wrong (how would I know?), and I'm plowing through the forms, too. But so far I've yet to find a single one of these public-spirited souls giving us a clue about how to fill the damned things out.

Kate


You're absolutely right, especially this John Dillinger, CPA guy. He's all over the Inet offering his services.

Isn't he an FBI most wanted dude?

http://fideicomiso.wordpress.com/2009/08/16/it%e2%80%99s-dar...
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[*] posted on 8-21-2009 at 07:28 PM


After reading all the information here and after having a fidi for 10 years and
another fidi for a lot for 3, we visited with our long time CPA. We printed some
info off this site and they researched and this is the advise.

Best to File, maybe a 10 percent chance you get caught but the fines are huge.
He felt this was a CP's dream....mucho dollars to file the forms!!! He felt that it was a way for the IRS to catch the properties sold and trace if it was not reported to IRS. Remember Switzerland.

We need a corp number but as a corp. we already have that.

He need the fidis, thank God, we have copies of both here and in BAJA, or
we would not be able to meet the Sept deadline. ( Baja House is boarded up
impossible to enter)
As for cost. The first year would be $200.00 and each year after would
be "minimal"

So we are going for it. No taxes to pay, just CPA fees, we have been with
this CPA for 26 years.

Just my 2 cents
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[*] posted on 8-21-2009 at 10:02 PM


Yeah, well to bring everybody back down to earth, here is an article is today's Tribune De Los Cabos:

http://www.tribunadeloscabos.com.mx/newpage/index.cfm?op=por...

It' too long to translate, but basically this local businessman is complaining that millions of dollars are being made by Americans who rent out their Baja homes like hotels. They are complete packages that include the house, a car, a panga and prepaid meals. His complaint is that all of the money is paid to the owners in the US, so Mexico doesn't get anything. He wants something done about it.

Of course, I didn't see where he complained about the 7-8 million Mexican's working illegally in the US who send home billions of dollars each year, without paying much in US taxes and using all the taxpayer provided public services.




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[*] posted on 8-22-2009 at 08:00 AM


Quote:
Originally posted by arrowhead
Of course, I didn't see where he complained about the 7-8 million Mexican's working illegally in the US who send home billions of dollars each year, without paying much in US taxes and using all the taxpayer provided public services.


Why didn't their employers in the USA deduct the taxes and SS from their pay as the USA law requires?




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[*] posted on 8-22-2009 at 08:07 AM


I've been told by a CPA that the Sep 23rd deadline is amnesty from criminal prosecution. If you have unreported income from the fidei, like rental income, you still need to pay the tax, pay the interest on the tax, and pay the penalty. If you have no income, the penalty for not filing the forms will be waived because you have reasonalbe cause (you didn't know you needed to file the forms). The not knowing reasonable cause waiver ends, or will be alot tougher to pull off, after the 23rd.

I have four years of returns that need to be amended. I have no fidei income so there will not be any tax liability or penalties. I found a CPA that will do it for $750.

I also called the IRS and after being transferred to the appropriate department that specializes in foreign trusts, I explained my situation and asked if I need to file Form 3520. I was told my question is "out of scope" and was advised to write to the IRS at the address in the 3520 instructions and include in the letter the Form 3520 completed to the best of my ability. That would get the process started before the deadline and therefore get me under the wire. I've decided not to do that.
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[*] posted on 8-22-2009 at 09:33 AM


Morgaine,

Very clear analysis. Thank you.




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[*] posted on 8-22-2009 at 10:15 AM


Again, has anyone ever heard of anyone ever getting in trouble FOR NOT FILING the IRS disclosure forms regarding 1)owning a Fideicomiso, 2)being a signer on a Mexican checking account or 3)being an owner of a Mexican corporation WHEREIN the US citizen has not sold property subject to the Fido not transfered funds to/from Mexico using either countries' financial institutions and not inadvertently disclosed it to the IRS themselves?

This will be the fourth time that I have asked the question. So far , no one has answered. Could this mean that no one reading this forum has ever heard of any one being discovered by the IRS under the conditions that I mentioned?

Makes me wonder if info is ACTUALLY shared between the countries pursuant to the 1992 treaty. 1992! That's a long time ago. There are thousands of US Fido holders. No one discovered as far as anyone knows on this forum? Hmmmm. What do you think that means?
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[*] posted on 8-22-2009 at 10:22 AM


No I've never heard of anybody getting in trouble.

But I've never seen a black swan either.

Perhaps nobody has answered your question because it is irrelevant.
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[*] posted on 8-22-2009 at 01:33 PM


Quote:
Originally posted by k-rico
I have four years of returns that need to be amended. I have no fidei income so there will not be any tax liability or penalties.


Oh yeah? What about that apartment in TJ you have been advertising for rent here?

***busted***

Yet another Nomad who doesn't know when to STFU.




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eureka.gif posted on 8-22-2009 at 02:57 PM


I had been leaning against filing the IRS form 3520-A. My Fideicomiso covers my 2nd home and I have never rented it out. No income has been derived from owning it. The Fido is for the land portion only. It has a stated value of $20K. I calculated the maximum possible fine and weighed it against the cost and risk of filing it and decided that:

1. The IRS is not interested in declaration because it is irrelevant to their main purpose; to collect hidden income from income producing properties or bank accounts or off shore investments.

2. Even though the blanket treaty agreement technically includes Fideicomisos (Not even sure about that. That is what some have stated on this string), the IRS wouldn't be interested.

3. If and when I sell the property, and if there is a Capital Gain, then I would report it to IRS. That would reflect Capital Gains I will have paid to the Mexican Government. They would be happy with that.

These are my own opinions and each person should be responsible and make their own decisions, depending on their own calculations, opinions and type of investment they own.

Now, after I had made these calculations I asked my CPA. Her advice:
The prudent thing to do is to file. But she suggested an easy way to do it; She gave me the form 3520-A with only my name and address filled in at the top. I would have to sign and date it at the end of the form. Attach a short statement saying, "This is a 2nd home for personal use only. It is never rented and it earns no income."

I really grilled her on this. I asked, "wouldn't I need to give the Fido number, which bank and also the address of the property?" She answered, "No, the shorter the better. It is standard procedure and I have many clients who do this. If the IRS is really interested, they will ask for more, but they probably won't."

I have never been audited but if any of her clients are audited, she will appear in their defense.

So, I will take her advice and send it in. By the way, it shouldn't be filed with your yearly income tax statement. It should be filed in a separate envelope. The IRS address where it is to go is in the instructions portion of the form.

Again, I am just passing this information on as to what I will do. You will have to make your own decisions. I will report here if there are ever any adverse results from my action.:)




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[*] posted on 8-22-2009 at 03:34 PM


i think tony is correct

until you actually make money on your fido the irs doesnt really care
to know


now...when you sell...thats another ballgame

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[*] posted on 8-22-2009 at 03:55 PM


Quote:
Originally posted by arrowhead
Oh yeah?...............


Yeah. The condo is owned by a Mexican. No fidei. :P


[Edited on 8-22-2009 by k-rico]
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[*] posted on 8-23-2009 at 08:41 AM
don't ask unless you know the answer


Quote:
Originally posted by k-rico
No I've never heard of anybody getting in trouble.

But I've never seen a black swan either.

Perhaps nobody has answered your question because it is irrelevant.


Thanks much for your thoughtfull and systematic insight into the "issue".

Very logical and shows wisdom based on reality.




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[*] posted on 8-24-2009 at 09:50 PM


Just spoke today to a La Paz executive of a major bank. He has been in charge of Fideicomisos for past 15 years. Out of 700+ fidei he holds in the name of the bank his understanding is that probably only 1-2% of people are filing since he only received till now one request to be signed in the name of the bank.
Now question is what is going to happen to the 98% of people that is not going to file form 3520.
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[*] posted on 8-25-2009 at 09:04 AM


Quote:
_____________________________________________________________________
Just spoke today to a La Paz executive of a major bank. He has been in charge of Fideicomisos for past 15 years. Out of 700+ fidei he holds in the name of the bank his understanding is that probably only 1-2% of people are filing since he only received till now one request to be signed in the name of the bank.
Now question is what is going to happen to the 98% of people that is not going to file form 3520.
______________________________________________________________:light:
I just looked at the 3520 and 3520-A forms and yes the forms ask for the
"trustee" signature. Hmmmmm. As we were getting set to take the fideis
to our CPA, we now will have to ask how he is going to get the Mexican banks to sign the forms. The IRS wants the fideis in English. Our CPA said he who knows someone who will translate them; however I don't think they no how thick these things are :lol::?: More and more questions.

As for sending in form 3520-A with only name and address; that sounded
good but brought up more questions:?: What about form 3520 that goes along with form 3520-A. Also with no SS# where will these papers end up
at? How will they get into your file to show you sent them something?

Just more questions? Sure glad there is a few weeks left to sift thru this.
Now I read there is a amnesty program for people who do not report
business income, rent income, bank accounts ect. This was posted on another site by a CPA of course.



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[*] posted on 8-25-2009 at 10:47 AM


We followed toneart's CPA suggestions. I downloaded the form, filled out the first page with our names, SS#, signatures, and appended a signed letter noting that the trust is a fideicomiso for our 2nd home which is for personal use, and never rented. Wish us luck.
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