OMG. As with anything the IRS touches, it is so complicated that even the IRS agents don't understand the law. That is the scary part. Soon we will reach the point where the simplified IRS form will say.

--How much did you earn?

--Send it in! )-:



Oh, for the days that living or owning a vacation home in Mexico was simple. I guess this now will consume my next week working on figuring out the forms and what to file.

To those familiar, (Thanks Kaye and Wiz, others) keep the info coming. The info is great. Seperately, the commentary is always interesting if not entertaining.

Chuburnaman, You are right that the IRS doesn't even understand the forms. When I was filling out the 3520 last March, I had a couple of questions (as the form itself is worded very confusingly - no surprise there - and the online instructions are not much help), I called the IRS hotline, ended up being referred to different numbers, different people. After 2 hours on the phone, and 5 different people, still no one had a clear answer to my questions - and some of the representatives had completely different advice than others! Finally, we just muddled through it ourselves, and did some research with others.

You file 3520 separate from your taxes, and mail to a different address, and I was happy that I had made copies of everything, as about 45 days after I filed the documents I received a letter from this office telling me that they showed that I had filed the document, but they were not able to locate the document in their files or in their system, and they needed to me send them a copy! Gotta love that.

Oh, man...is that ever the truth. I went to tax court against the IRS and submitted the same info three different times and yet they still could never find the records. It was sent to two of the departments twice...a total of three different depts rec'd the info but yet none had it. Then, after the case was done...I WON BY THE WAY...the only time I ever did...they still continued sending bills for various amts of money on the same case. This went on for over a year after the case was settled.

Well, I have been reading this all morning. I now will be making an appointment with my eye doctor on Tuesday. I think all this info is great. So, I am asking those that have knowledge to read the below recap and advise if I am misinformed, ill advised, crazy or some of all of these.



For most of us that own property here, don?t earn any income here and haven?t filed previously, the below applies.

A) If you are a US citizen and own property in the Yucatan, therefore have a Fidei Comiso, considered a trust, you are required to submit form 3520 to the IRS.

B) There is a deadline of September 23, 2009 to file this form. This will cover this year and all previous years??

C) If you feel you will not have time to submit the form before September 23, you can submit a letter to get yourself in compliance. http://www.irs.gov/pub/foia/ig/ci/ltr-v ... 090729.doc

D) You then must complete the form 3520 as soon as possible and submit it to the IRS. Info: Both the letter and the form go to different addresses than normal IRS documents.

E) If you are in compliance with the above steps, there currently is no penalty as long as you did not earn income from this property or from an other source in Mexico.

F) You need to submit this form each year. According to Kaye, you should make sure you report property improvement to minimize capital gains should you ever sell the property. Under current law, you again would owe nothing.

G) If you have a Mexican bank account and have a aggregate of $10,000 in the account in a calendar year, you need to file Form TDF 90.22.1 with the Treasury Department. Again, different address. This certainly would include the monthly deposits mentioned in another post. viewtopic.php?f=12&t=1428&st=0&sk=t&sd=a

The filing of this form puts you in compliance, but does not necessarily preclude any penalties that may apply. The 2% penalty mentioned in the above post would apply.





T&M?We are all waiting for your instruction booklet to be printed. It will become a best seller in short time.

Hope this recap is helpful and straightforward.

Pretty good summary, C Man...You will need to apply and receive a tax ID number for the trust first, which can be done over the internet by your tax person, then the initial 3520 would need to be filed and then I would think the subsequent years, requiring the 3520A would also need to be filed after you send in your amnesty request. Please note that the regular date for filing those forms is in March I believe, which is a different time than your regular taxes. There is also the decision as to whether you are filing on a calendar year or a fiscal year...that would be something you need to discuss with your tax person.



By the way...the tax ID number issued to me via internet was not the one they had assigned to me and my CPA had to contact them for clarification as to which one was correct, so be sure to check to make sure your numbers don't change.

CMan - your summation is what I understand to be correct also, and after about 7 billion hours of research(okay, that may be an exageration) I probably could do a booklet! One slight modification, the first year you file the 3520, each year after that you file the 3520A; they are filed with a separate office, and they are due to be filed each year by March 15 (as opposed to April 15), except in the case of the initial purchase year, in which they should be filed within 90 days of closing on the property.

Are our brains on the same wave length or what?? We both added the same additional info....LOL

I have read every word of every post on this thread...all I can say is WOW!!!



I thought Canadian tax law was complicated...not any more.



If or when we make the move to buy and live in Mexico full time, we have the option of declaring ourselves non-residents of Canada. We would still hold our Canadian citizenship. It would require selling or getting rid of all physical things in Canada. But then it means we would no longer have to file income tax returns in Canada. Any income we recieve from Canadian pensions, investments etc. would be taxed at source (but at a rate of 50% less than normal). Property holdings in Mexico would be of no interest to the Canadian gov't.



Now THAT is pretty simple.

Kaye - too funny, we are thinking alike!

The IRS advised me to file the 3520 without a tax ID number, saying they would issue me a tax ID when they received the filing. Later, I get a letter from the IRS saying they had issued me a tax ID number, and now they needed me to refile the form with the enclosed number. Ummmm okay, couldn't somebody put the number on the form??? I just made another copy, put the tax ID number on it, and resent it in. Goodness, these are the goofs that are going to come after me if there is a questions on my taxes?

Too funny that the IRS has announced that they are hiring 1,000 more of these goofs. How many IRS agents does it take to perform an audit? 12. One to read the document and 11 to provide differences of opinion on what it means.

Got to love big government? NOT.