There is much misinformation regarding the FATCA provisions of the HIRE Act and having to pay tax on the value of using your property, uncompensated use. Those stating that your personal use is taxable are interpreting the Internal Revenue Code out of context.
Here’s why: The FATCA provisions regarding personal use are for nongrantor trusts. A Fideicomiso is considered a grantor trust! If you claimed the fair market value of the use of your property, we can amend your returns and provide a more technical explanation.
Please see the following excerpt from a post I wrote last year:
Having property in a Fideicomiso does not require you to pay tax on the value of using your property.
By glancing at the FATCA provisions of the HIRE Act and the subsequent revised Internal Revenue Code, it is easy to see why someone may jump to that conclusion and believe that they are required to pay tax on using their property.
(It’s a sad commentary on Congress and the IRS, that people actually believe that they are required to pay tax for simply using their own property!)
I think that the misinformation regarding uncompensated use is due to a literal interpretation, taken out of context, from the HIRE Act and the revised Internal Revenue Code.
Therefore, I repeat: Just because you have property in a Fideicomiso does not mean that you have to pay tax on the value of using the property!
Please contact us if you require help correctly filing or amending your required Foreign Reporting Forms.
John Dillinger, CPA, PFS, MS.tax Dillinger Carter & Associates, Inc. 4235 24th St San Francisco, CA 94114 T: 415-524-7572 F: 415-524-7571 jdillinger@dcataxservice.com www.dcataxservice.comIRS Circular 230: Any tax advice included in this communication was not intended or written to be used, and it cannot be used by any taxpayer, for the purpose of avoiding any penalties that may be imposed on the taxpayer by any governmental taxing authority or agency
