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A Fideicomiso Isn’t a TrustA Fideicomiso Isn’t a Trust

A recently-issued private letter ruling clarifies this issue

Amy P. Jetel, Partner

November 16, 2012

1 Min Read
A Fideicomiso Isn’t a Trust

 

The Internal Revenue Service finally published a private letter ruling that U.S. landowners in Mexico have been waiting for all year: PLR 201245003 (released Nov. 9, 2012).

U.S. taxpayers have questioned whether Mexican land trusts, or fideicomisos, are really “trusts” for U.S. taxpurposes.  Many of these taxpayers entered into IRS voluntary disclosure programs out of fear that they might be subject to penalties for failing to file foreign-trust Forms 3520 and 3520-A.  But, if a fideicomisoisn’t a trust, then it’s not a foreign trust—and Forms 3520 and 3520-A aren’t required.  In PLR 201245003, the IRS ruled that a fideicomiso isn’t a trust, which is great news for U.S. taxpayers who own land in fideicomisos.

For a thorough discussion of the legal analysis of the PLR, see my article “Fideicomisos: Clarity at Last?” in the November 2012 issue of Trusts & Estates or on Wealthmanagement.com.

About the Author

Amy P. Jetel

Partner, Beckett Tackett Jetel

http://www.btjlaw.com/

Amy P. Jetel focuses her practice on the design, implementation, and administration of outbound and inbound foreign trust and entity structures to meet the estate-planning and asset-protection goals of multi-jurisdictional clients.  In this practice, she has gained a depth of experience in the U.S. tax and compliance aspects of non-U.S. trusts and entities, and she frequently addresses complex international tax and treaty issues faced by individuals with ties to multiple jurisdictions.  Ms. Jetel has developed a niche practice in planning around the throwback-tax regime that applies to foreign non-grantor trusts, and in representing clients before the Internal Revenue Service to bring previously unreported foreign structures into full compliance.  Ms. Jetel also practices in the areas of traditional estate and disability planning, probate and estate administration, and entity formation and governance.  She is a frequent author and speaker in the areas of estate planning, asset protection, and international taxation and compliance.  Ms. Jetelis a veteran of the U.S. Navy.