As you know, properties along the Coast
of Mexico owned by Americans must hold title through Fideicomisos
which are foreign trusts. This means certain special tax forms must
be filed each year with the IRS to report your Fideicomiso holdings.
Though a few tax commentators have written learned articles saying
Fideicomisos are required to file these forms, the IRS has never so
stated in writing and the IRS has further stated it does not intend
to exempt Fideicomiso owners from filing these forms forms.
These forms do not result in any
additional tax, but are informational only. Starting in tax year
2011, you may also have to file Form 8938
Failure to file these forms in a timely
manner, or filing the required forms late can result in the IRS
imposing penalties up to 35% of the value of the real property held
in the Fideicomiso. The IRS has stated that if a late filing excuse
is attached penalties may be waived. In fact they have waived
penalties in the past though it is not certain how long this will
continue into the future.
- Form 3520A is due on March 15th, but can be extended if an extension is filed by that date.
- Form 3520 must also be filed for your fideicomiso. This six page form is due on the same day as your personal tax return but is mailed to a separate address.
We have prepared hundreds of Forms 3520 and 3520A for our clients
in Mexico over the past ten years. If you want to prepare the forms
yourself, we also offer a review service so you can be assured you
prepared them correctly. Let me know how we can help.
Click
here to download our Fideicomiso/3520/3520A Tax Organizer. After you
fill it out, return it to us by fax or email and we can provide you
with a fee quote. (File is in msword format for
easy completion)
We will be in Los Cabos and La Paz to assist our clients there from March 16th thru May, 2012. Please email or contact us for an appointment.
Don D. Nelson, C.P.A., Attorney at Law
Kauffman Nelson LLP
Dana Point, CA 92629 USA
US Phone: 949-481-4094 US Fax
949-218-6483 Skype: dondnelson
Email: ddnelson@gmail.com
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