Legal Update – Part One
I have had several questions lately regarding IRS filing requirements for US citizens with corporations, bank accounts and fideicomisos in Mexico.
Over the past few years, there have been a number of changes to the US tax code. Some of these changes affect American citizens who hold property in a foreign country, who belong to a foreign corporation or who are beneficiaries or trustees of a foreign-owned trust. My good friend Robert Schilling, a CPA in New York, has an investigation underway. More details will follow as I receive them.
Robert says that the following seems likely, although the IRS needs to provide additional rulings:
- Persons with their residential property (no cash) in a fideicomiso should probably file Forms 3520 and 3520A.
- Persons with a Mexican bank account need to file other forms (unknown at this time), in addition to the 3520 and 3520A.
- Persons with a foreign corporation need to consult a CPA who is well versed in tax law as it applies to foreign-owned property.
There is a great deal of confusion, and I think the majority of people do not file, simply because it is so difficult to get information. Bob recommends filing in order to avoid any potential penalty for not doing so.
If you want to do some investigating of your own, here are links to information and instructions about those forms on the IRS website:
More information will be posted as we receive it.
Posted: November 4th, 2011 under Tierra Yucatan News.