Fideicomiso private letter ruling offers some hope

The IRS has issued a Private Letter Ruling that says a fideicomiso is not a trust. If that’s so, then you don’t have to file Form 3520 and Form 3520-A every year.  Nor do you face the penalties for failing to do so.  This is an immensely sane step in the right direction.  Fideicomisos are […]

IRS on fideicomiso structures as “foreign trusts”?

One of the Eternal Mysteries of (Tax) Life:  Is a fideicomiso a “foreign trust” for U.S. income tax purposes? In an Information Letter from late 2010 and released in early summer this year (and published in Tax Notes Today in September, 2011), the IRS Chief Counsel’s office side-stepped the question.    (Sorry, Grace!) Release Date: […]

FAQ 17, FAQ 18 deadline is August 31, 2011

I just spent the weekend in Form 3520 hell, cleaning up a situation with a client and a fideicomiso.  We did Form 3520’s and Form 3520-A’s for all of the years in question and will shoot them off to Ogden, Utah by August 31, 2011. The IRS doesn’t really know what a fideicomiso is, and […]

Fideicomiso question and Form 3520

An inquiry from a reader: Mr. Hodgen, After the release of both IRS forms 3520 & 3520-A instructions, is there a conclusion that a grantor of a trust using their own property (fideicomiso) has to treat the uncompensated use of trust property as a loan/distribution? After reading both forms instructions there appeared to be a […]