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November 6, 2012 - Phil Hodgen

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 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.  :-)

(We are hiring.  If you’re looking for an international tax lawyer job, give us a call.) 

Americans Living Abroad