IRS Revenue Ruling 2013-14 States A Fideicomiso Is Not A Trust For United States Tax Purposes

In IRS Revenue Ruling 2013-14, the Internal Revenue Service clearly stated that a Fideicomiso isn’t a “trust” for United States tax purposes. American taxpayers who own their Mexican coastal real estate through a fideicomiso are not required to submit foreign trust forms (Forms 3520 and 3520-A). As a result, such taxpayers do not need to worry about the failure-to-file penalties associated with these forms. Still, there are always loopholes to consider so if you have questions about this ruling, please contact international tax consultant Yana Weave at ELLS CPAs for help.

In the past, this holding has been confined to a Private Letter Ruling 201245003 (July 30, 2012). The problem is that an IRS private letter ruling only can be used by the taxpayer who requested it. As a result, it could not be cited by other taxpayers as binding authority. With IRS Revenue Ruling 2013-14, the provision now applies to all taxpayers across the board.  For a thorough discussion of the legal analysis of the PLR (the reasoning of which is followed by Rev. Rul. 2013-14), see “Fideicomisos: Clarity at Last?” in the November 2012 issue of Trusts & Estates.

What ELLS CPAs finds ironic is that IRS Revenue Ruling 2013-14 is taking place at the same time that the Mexican House of Representatives is reforming the Fideicomiso laws. The proposed reforms once completed will allow foreigners to directly own such property. If you want to know more about what is happening in Mexico, please check out this News Blog by Yana Weaver on the ELLS CPAs website.

Even with these updates, ELLS CPAs realizes it is far from comprehensive. Although this content contains accurate information, it is inherently limited on account of the length of the article and the complexity of the Fideicomiso issues at hand. As a result, it presents only a partial view of the subject matter. To learn more about how these issues might apply to your tax or foreign land holdings situation from a more three-dimensional perspective, please call ELLS CPAs international tax consultant Yana Weaver at 714.569.1000.

Yana Weaver


Yana N. Weaver is a CPA, MBA, MST with over 20 years of experience in accounting and tax. Fluent in Russian and English, she specializes in helping foreign nationals as an expert in international taxation issues as well as U.S. residents who do business abroad.

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