Thank you for posting the above. After reading and reading the IRS information I too came to this conclusion. Since the Fideicomiso is considered a grantor trust, yeah!, we don't have to pay uncompensated usage. This explanation from one Law Firms "Client Advisories and Bulletins" is the best I've found so far: Katten Muchin Rosenman LLP | News & Publications | HIRE Act Affects Foreign Trusts and Imposes Additional Requirements on U.S. Persons with Foreign Accounts
I'm still reserving a final opinion on the main issue presented here, but I've got another question for those who are following this thread: my fideicomiso names my wife and I as trustees of the trust (as I mentioned ealier, the bank terms itself a mere fiduciary, and absolves itself of all meaningful responsibility for the trust). That being the case, I'm considering doing the 3520 in my capacity as trustee, as this may make the reporting process more straightforward since my trust will have reported, as required (distinguishing the duty of the trust to report vs the individual owner's duty to file a "substitute" report in the absence of a report from the trust, itself). I'm left wondering just how common it is for fideicomisos to name the "buyers" as trustees, or if others' fideicomisos designate the buyers differently. In Spanish, the word for trustee is "fideicomisario", if you'd care to look at your trust document and comment on whether you were also named trustee. (Some dictionaries define this word as "beneficiary", adding to the confusion to those, like me, who are trying to sort this out, but there is another, direct translation of beneficiary in Spanish- "beneficiario", and that word is used in our trust document to speak of the person who gets the trust property in the event both my wife and I die before the trust is dissolved.) ________________________
I don't know much but I don't know of any Fideicomisos in which the Buyer(s) is (are) NOT named as the Trustee(s). Of course I don't go around reading them but this is my understanding on the way they are drafted. Is anyone aware of a different scenario?
Just to make life more interesting regarding this matter: Amendment to the Bank Secrecy Act Regulation Regarding Reports of Foreign Financial Accounts This past February the Financial Crimes Enforcement Network (FinCEN) amended the regulations regarding the Report of Foreign Bank and Financial Accounts or "FBAR” in response to multiple comment letters requesting more detailed explanations regarding the scope and application of the FBAR rules. FinCEN focused on three areas: The scope of the persons that are required to file reports of foreign financial accounts. The types of accounts that are reportable, and relief in the form of exemptions for certain persons with signature or other authority over foreign financial accounts. Adoption of provisions intended to prevent persons subject to the rule from avoiding their reporting requirement. The new FBAR regulations revise the definition of signature (or other) authority to more clearly apply to individuals who have the authority to control the disposition of assets in the account by direct communication (whether in writing or otherwise) to the foreign financial institution. Individuals are considered to have signature or other authority if the bank will act upon their direct communication. Accordingly, multiple individuals may have signature authority over any one foreign bank account. In addition, the regulations clarify whether an account is indeed foreign and therefore reportable as a foreign financial account. They reiterate that a bank account is not considered foreign if it is held in a U.S. branch of a foreign institution. Further, if a U.S. bank holds a person's non-U.S. assets, an FBAR filing requirement is not triggered. The regulations also clarify that officers or employees who file an FBAR because of signature or other authority over the foreign financial account of their employers are not expected to personally maintain the records of the foreign financial accounts of their employers. Finally, the FinCEN indicated that it plans to allow electronic filing of FBARs in the near future. The new FBAR regulations were effective on March 28, 2011, and apply to all FBARs required to be filed by June 30, 2011, with respect to foreign financial accounts maintained in calendar year 2010 and for all FBARs required to be filed with respect to all subsequent calendar years. FinCEN believes that these clarifications and changes should address many of the concerns expressed in the public comments and therefore should make it easier for taxpayers to determine whether the FBAR must be filed.
Thanks for the info, Gabesz! In case any readers are unfamiliar with the subject, the info Gabesz has provided pertains to foreign bank accounts, and the reporting requirements associated with them (FBAR), NOT to fideicomisos- which have their own reporting requirements, and are reported on forms different from those used for the foreign bank account reports.
Actually this does apply to those trusts which are being held by US Banks. In the case of Banamex this may or may not apply and those who have trusts with Banamex need to find out if Banamex is considered a foreign bank or a division of a US Bank(Citibank) in which case the Asset(real estate) does not have to be reported. Just add another wrinkle to the issue. I think they do this to drive us crazy and have the accountants make more money to define what is reportable and what is not.
I can see where you're going with this- if the bank acting as fiduciary is not "foreign", the trust it administers must not be foreign, either! And, if the trust is not "foreign" there is no requirement to report the fideicomiso as a foreign trust. It's an interesting argument- but one I'd hate to have to argue before the IRS. Here's how I see it. Fideicomisos are a product of Mexican Law, governed by Mexican Law, administered by banks in Mexico- who must get permission from the Mexican Ministry of Foreign Affairs to set up each trust- and, the trust property, in each case, is located in Mexico. It would be hard for me to imagine a trust that is more "foreign" than that. Reporting of foreign trusts is done on Forms 3520, and 3520a; reporting of foreign bank accounts, FBAR (a separate issue), is done on Treasury Form TD F 90.22-1. And, Gabesz, apparently it's not just accountants who make money off this confusion if we can believe this story, posted to the web, June 13, this year. ___________________
This ruling is new and could override the old ones. However the real proof has to be that the bank is US Owned as we know Banamex is. Tough to prove this all in front of the IRS but it could delay issues for a while. And yes I do know about people and the proper reporting issues and that is a tough nut to get over.
15 days left Once again the IRS is offering a form of amnesty for those who have not filed forms 3520 and 3520A through the years. The process appears to be simpler for those who owe no back taxes; but, for those who do, there seems to be a way to get straight with IRS, taking advantage of the "2011 Offshore Voluntary Disclosure Initiative". See the IRS website for full details. The deadline for action seems to be 31 August, 2011. Forms which should have been filed for years 2003-2009 are affected. ________________________
So what does the consensus seem to be on FMV for those of us who live here fulltime and derive no income from our "trust"? I'm thinking of not filling out any of that part of the form.
