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 title-holding mechanisms required by the Mexican Constitution. A Mexican bank holds title to your real estate but otherwise takes no responsibility whatsoever for anything. Trustees are required to protect and preserve assets for the beneficiaries. A fideicomiso does not behave like a trust at all.
Go see John Strohmeyer’s blog, where he has written about the PLR. John’s a good guy. Too bad he’s in Texas and doesn’t want to move to California. :-)
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