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BANAMEX....who are the chosen?


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Joco's substitution of the $200,000 USD FATCA limit for "Americans living abroad", (in place of the $50,000 USD FATCA limit for people filing normal returns with the IRS), fails to mention the other IRS tests and requirements we must meet to qualify for the higher limits.

Per IRS rules, on their website, to use Joco's exception we must meet special qualifications:

  • Taxpayers living abroad. You are a taxpayer living abroad if:
    • You are a U.S. citizen whose tax home is in a foreign country and you are either a bona fide resident of a foreign country or countries for an uninterrupted period that includes the entire tax year, or
    • You are a US citizen or resident, who during a period of 12 consecutive months ending in the tax year is physically present in a foreign country or countries at least 330 days. "

How many of us stay out of the USA at least 330 days a year?

Go back and visit the grandkids for a total of 36 days that year, and bingo - you are liable at $50,000 of foreign financial assets, (if your tax home is the USA).

or

How many of us stay out of the US, uninterrupted, for the entire tax year.... not one day back in the USA.

( when claiming that the USA is not your "tax home").

When we read just the parts that fit our opinions, (ignoring the important bits), and then report that incomplete tax advice to others, we can put readers at risk of serious penalties ranging from $10,000 for FATCA non-filing, and $50,000 for continued non-filing.

FACTA doesn't apply to me so I don't care.

If FACTA applies to someone, that person needs to talk to an accountant and I am sure whoever it does apply to is smart enough to find a accountant or already has one. That person does not need this board's advice.

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FACTA doesn't apply to me so I don't care.

If FACTA applies to someone, that person needs to talk to an accountant and I am sure whoever it does apply to is smart enough to find a accountant or already has one. That person does not need this board's advice.

Again, please ignore Joco's advice, and know that if you have more than $50,0000 in foreign financial assets - which is many of us on this board - who do not use international tax accountants - then, depending on your US IRS defined "tax home" , you may be required to file under FATCA.

Read IRS Pub. 54, pp 12 -16 on "Tax Home" definitions and rules, and decide if you need to file (this month), or talk with a qualified professional who knows the peculiarities of the IRS for Americans living in Mexico.

Keeping it simple:

If you were out of the USA for 330 days or more last year, then you are exempt, and do not have to file.

If you were in the USA for more than 35 days last year, the determination gets more complex.

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Again, please ignore Joco's advice, and know that if you have more than $50,0000 in foreign financial assets - which is many of us on this board - who do not use international tax accountants - then, depending on your US IRS defined "tax home" , you may be required to file under FATCA.

Read IRS Pub. 54, pp 12 -16 on "Tax Home" definitions and rules, and decide if you need to file (this month), or talk with a qualified professional who knows the peculiarities of the IRS for Americans living in Mexico.

Keeping it simple:

If you were out of the USA for 330 days or more last year, then you are exempt, and do not have to file.

If you were in the USA for more than 35 days last year, the determination gets more complex.

You know there is a theory that children who drink cow's milk are not short.

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Bwhite, as I said, I am no expert. That is why I said everyone should read it and make up their own mind about it. Do you own your own home outright, or is it through a bank trust?

Foreign real estate held through a foreign entity

No, but the foreign entity itself is a specified foreign financial asset and its maximum value includes the value of the real estate

Now, where does that leave us?

Foreign real estate held through foreign trusts used to be a real mess, but the IRS cleared that up a year ago with an official Final Ruling in June 2013. The IRS publicly announced that as long as a real estate trust (Mexican Land Trusts, aka "fideicomiso") met several qualifications, it is NOT a financial asset nor a financial account. The IRS requirements:

1. Only 1 property can be held by the real estate trust (fideicomiso) to qualify as exempt.

2. The only purpose of the real estate trust that is permitted or required [by the terms of the fideicomiso] is the activity of holding legal title to the property. Qualifying (exempt) real estate trusts must NOT engage in any activity beyond holding legal title.

3. The American owner of the qualifying real estate trust (fideicomiso) is allowed to rent their property.

http://www.irs.gov/pub/irs-irbs/irb13-26.pdf describes the details and explains that qualifying Mexican Land Trusts do not have to file the 3520 or 3520A financial reporting forms.

Hope that helps people understand that after June 2013, Americans do not include fideicomisos/Mexican Land Trusts in their reporting of foreign financial assets as long as they meet requirements 1 and 2 listed above.

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Well, I am afraid that this FATCA is going to be a real boondoggle. If you have more than $50,000 in assets in a complying foreign country, you will have a problem. If you own a home, it had better be a real jacal, otherwise you will be above the $50,000 limit. ..

The more I read about this, the worse it seems. I am no expert, but I think everyone needs to read up on it before they are blind sided.

http://www.irs.gov/Businesses/Corporations/InformationforUSTaxpayers

Read through it and decide just how it will affect you personally. Good luck.

I've followed FATCA regulations for the past 4 years, and read pretty much all of the IRS's information published, and have discussed these issues with 4 different international accounting firms who specialize in these areas, and none of those experts nor the IRS websites include "owning a home" in a foreign country as a financial asset or foreign financial account that has to be reported under FBAR or FATCA.

According to the written advice of 3 different professional international tax advice firms, I think you may misunderstand the FBAR and FATCA reporting requirements, as they do not require Americans who own a home in foreign countries to report them, except for some unusual NON-qualifying Mexican Land Trusts (MLTs - aka unusual or atypical "fideicomisos"). Note that most normal MLTs / fideicomisos meet requirements 1 and 2 (listed in the previous post) so they are exempt from FBAR and FATCA reporting requirements.

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never received a letter, but, just called Banamex US and our account is being closed

Just got the official letter yesterday. Closed.

FYI for those whose SSA checks have been going there: The form the Mexican bank will send to SSA to get your checks deposited here asks for your address. They will only accept your home address: no PO. Boxes or Mail forwarding services. I called the SSA office in Guadalajara this morning and received that information.

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I went into the Banamex bank in Chapala to talk with the manager this mornig. I wanted to let him know that he should not be surprised if my account with them grows substantially. I also let him know that I have changed my social security direct deposit to their bank. To do that Monday I faxed a letter to social security office at the Consulate General of the United States in Guadalajara and gave them all the necessary information that they required. I also used their office when I originally applied for my early withdrawl social security funds some years ago but that was done in person.

The manager of Banamex in Chapala is very much aware of what Banamex USA has done but he knows nothing of the whys and wherefores.

Interestingly he also told me that it was not just Americans living here, but that he also has many Mexican clients who were also told the same thing and have to close their account.

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The rule is that you have to be a US resident to have a US account so that would apply to anyone who is

not. Many people who were resident when they opened the accounts but are not anymore, were left in peace but when audits and investigations started many people are caught in the net and the ones that are not could be at a later date.

The vast majority of these people did not do anything wwrong but the rule changed and the bank is in the cover my butt mood .

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Meanwhile, Banamex USA had given both me and my spouse high limit credit cards clearly labeled "Banamex USA Mastercard" No information about that in the checking account termination letter. On the monthly statements, the numbers to call are the Banamex USA contact numbers. I called and asked if the credit cards would be terminated as well and the rep said "no, but you'll need to find some other way to pay them" (since no account at their bank would exist to transfer payment from). That's no problem, but I'm still wondering if those cards will be good after June 30th. Anyone know more?

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Interesting. They welcome you charging on their credit card but no you cannot have an account in their bank.

Yes it is, considering that they have steadily raised the limit on those cards to the point where we could take a very nice ocean cruise on them. Since we pay them off every month, it's not a very profitable situation for the bank, but they do extort the yearly fee and whatever they can get from the merchants. We will wait and see what happens down the line.

Downright funny, all in all. :ph34r:

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Yes it is, considering that they have steadily raised the limit on those cards to the point where we could take a very nice ocean cruise on them. Since we pay them off every month, it's not a very profitable situation for the bank, but they do extort the yearly fee and whatever they can get from the merchants. We will wait and see what happens down the line.

Downright funny, all in all. :ph34r:

The bank makes lots of money based on the discount rate that vendors pay for the privileged of accepting Visa/Mastercard/AE/ETC - so you need to look at that too rather than just the interest rate they charge you for loaning you money on your credit card (your outstanding balance is a loan).

The discount rate comprises a number of dues, fees, assessments, network charges and mark-ups merchants are required to pay for accepting credit and debit cards, the largest of which by far is the Interchange fee. Each bank or ISO/MSP has real costs in addition to the wholesale interchange fees, and creates profit by adding a mark-up to all the fees mentioned above. There are a number of price models banks and ISOs/MSPs used to bill merchants for the services rendered. Here are the more popular price models ...http://en.wikipedia.org/wiki/Merchant_account#Discount_Rates - so if you charge $100 on your credit card, the merchant may only receive $95 in payment - depends on the merchant's relationship with VISA etc. Here is an example of one company's rates - https://merchantcenter.intuit.com/wapweblet/ims-mp-help/en/pos/svc_mp_daily_fees.html

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The bank makes lots of money based on the discount rate that vendors pay for the privileged of accepting Visa/Mastercard/AE/ETC - so you need to look at that too rather than just the interest rate they charge you for loaning you money on your credit card (your outstanding balance is a loan).

The discount rate comprises a number of dues, fees, assessments, network charges and mark-ups merchants are required to pay for accepting credit and debit cards, the largest of which by far is the Interchange fee. Each bank or ISO/MSP has real costs in addition to the wholesale interchange fees, and creates profit by adding a mark-up to all the fees mentioned above. There are a number of price models banks and ISOs/MSPs used to bill merchants for the services rendered. Here are the more popular price models ...http://en.wikipedia.org/wiki/Merchant_account#Discount_Rates - so if you charge $100 on your credit card, the merchant may only receive $95 in payment - depends on the merchant's relationship with VISA etc. Here is an example of one company's rates - https://merchantcenter.intuit.com/wapweblet/ims-mp-help/en/pos/svc_mp_daily_fees.html

"and whatever they get from the merchants"; which you expanded upon. Having once been a Mastercard merchant, I know you pay dearly for the privilege of having that service for your customers.

When I needed a number of appliances for a kitchen remodel, Tio Sam's gave me a very nice discount for paying in cash. They said it sometimes took months for them to get their money through the credit card system.

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Like any other cost of doing business, the merchant is going to pass the cost of using credit cards along to the consumer.

We have taken advantage of the "cash" discount from Tio Sam as well. They extend it to direct bank transfers on the more expensive stuff.

I haven't used a credit card in Mexico since we moved here more than 6 years ago.

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Like any other cost of doing business, the merchant is going to pass the cost of using credit cards along to the consumer.

We have taken advantage of the "cash" discount from Tio Sam as well. They extend it to direct bank transfers on the more expensive stuff.

I haven't used a credit card in Mexico since we moved here more than 6 years ago.

The only uses we have had for a credit card while in Mexico have been for importing goods from the states. Credit cards are useful financial transaction tools unless people are fool enough to buy things they don't have to have and pay interest rates that would make a Mafia don blush. On the other hand, if your refrigerator dies before you've got the money to buy a new one.....a credit card be a grand thing to have, interest rates or not. As usual, the poor without cash savings get the dirty end of the stick.

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Our only reason for using a credit card in Mexico is to be able to get out of the hospital. One can make arrangements with your bank to increase the limit, if you have a good relationship and a good balance in savings or investments with that bank. Otherwise, you can be detained in the hospital for extra days, making arrangements, while the bill increases and your stress level rises along with it.

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Social Security direct deposit can be changed to another bank with a phone call. I do not know which criteria needs to be met but these were the ones I had in force that I knew would allow me to just call SS in the US.

I went from a US bank to another US bank.

My SS address is listed in the US as I changed it back there just before my Mexican citizenship came through several years ago.

I think it is worth a phone call to their telephone number for changing direct deposit.

The caveat is that their telephone line is loaded with callers so the wait to get a representative is very long. You can leave your number and they will call you back or call VERY early in the morning and then the wait is not very long.

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Here is one website’s opinion as to what is going on with Banamex.
The dollar vigilante blog
Breaking News: US Expats in Mexico Left Stranded In Latest FATCA Escalation
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[Editor's Note: The following post is by TDV Editor-In-Chief, Jeff Berwick]

mexico-flag-2-370x229.jpgAs the first set of Foreign Account Tax Compliance Act (FATCA) compliance issues for banks worldwide is set to come into effect on July 1 we have seen a flurry of banks around the world advising US citizens that they will be immediately closing their accounts.

None has been so far reaching as this notice sent to US citizens who have accounts at Banamex USA in Mexico this week, however.

Banamex USA's parent, Banamex, is the second largest bank in Mexico and there are over 1 million US citizens living in Mexico, by far the largest amount of any country, and so this news will be felt over a very widespread area.

Notices have begun to be sent by Banamex USA, a bank operating in Mexico and used by many American expats in Mexico, to all US citizens notifying them that their accounts will be closed within 30 days.

Here, here and here you will find three separate online discussions surrounding Banamex USA's summary closure of American's accounts.

In most of the forums people know the reason why - FATCA - but in one of the forums in particular the people are not even aware of FATCA and its implications. This action by Banamex USA is, of course, because of FATCA, which has forced 77,000 banks in 70 countries to surrender all information on American customers to the Internal Revenue Service (IRS) or be extorted and possibly put out of business altogether.

Banamex USA, a subsidary of Citibank with its headquarters in Los Angeles, has sent letters to many US customers informing them that their accounts will be closed June 30. As one online commenter wrote:

"No more SS check deposits: no more linking of accounts to Banamex Mexico, no more credit card, no more ATM for free, no more nada."

One customer was told that it was a "bank decision" with no reason given why. This move has left former account holders scrambling to find a bank that will let them open an account without their presence in Mexico, something likely impossible to find.

It does not appear that all accounts will be closed, but nobody knows Banamex USA's strategy here, even banking insiders in the US who we have contacted who are confused about what is going on.

What's for sure is this: Are you an American expatriate living abroad or an American currently thinking of moving abroad? This could and likely will happen to you.

OPTIONS FOR US EXPATS IN MEXICO

There are many ways to protect yourself and to sidestep many of the issues that FATCA will be bringing upon US citizens trying to transact in the financial system worldwide.

In the case of Americans who live and/or spend a large amount of time each year in Mexico one solution is to attain Mexican citizenship (this is a process that TDV Passports can help with). By doing this you can still have bank accounts in Mexico if you so chose as you can open the account as a Mexican citizen, not as a US citizen, thereby not being restricted by banks that do wish to deal with US citizens due to the egregious nature and expense of filing with the US government all transactions of US citizens.

Having a second citizenship, especially for US citizens, is a very prudent move as it has become very difficult to do anything financially, worldwide, as a US citizen. It also has a tremendous amount of side-benefits including large tax breaks (up to nearly $200,000 per year, tax free, for a married couple if they live outside of the US)... and if you choose to renounce your US citizenship the benefits can be massive for those with a high net worth or income as this would unchain US citizens from the worldwide taxation imposed on them by the US government.

Other options that are still available to US citizens is to re-organize their affairs internationally using things like offshore trusts which are specifically set-up in a way that FATCA regulations do not apply to it. This is a service, for high net worth (over $1 million) US citizens that is offered exclusively by TDV Wealth Management (TDVWM). TDVWM has recently held two Crisis Conferences in Panama and in Mexico helping US citizens stay ahead of the curve and to organize their affairs prior to events, which we predicted, such as more banks worldwide closing accounts for Americans.

We also predict that more countries in the West will begin to enact FATCA like controls as the economy in the West continues to fall and governments begin to enact more egregious worldwide taxation laws. In the case of Canadians, for example, many "snowbirds" (those that are retired and usually spend six months or more per year in the US) are beginning to be deemed "US resident" even without their knowledge and will soon find themselves under attack by the IRS for tax liabilities. As well, the Canadian and US governments have reached all manner of agreements tying the sharing of financial information between the two countries.

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As we've researched and written here and at TDV Wealth Management Crisis Conferences (which we will be holding another one soon, likely in Mexico due to recent events), FATCA is very real and Americans abroad will be forced to adapt and quickly. Many might simply end up without a bank account altogether and unable to open one abroad when they get this now all-too-common letter that your bank no longer wants to serve you.

We hate to constantly be the bearer of bad news but those who have been following TDV know that we have been warning of these events for a number of years. And we expect things to go nowhere but downhill from here as governments in the West implement nefarious capital controls such as FATCA.

Stay tuned at The Dollar Vigilante blog as we continue to cover FATCA and its consequences and offer insights, news, analysis and solutions to protect yourself at The Dollar Vigilante newsletter. And pass along this particular news to US citizens who are Mexican expats to inform them to prepare for more bank account closures for US citizens and what they can be doing about it to protect themselves.

Have a FATCA story or concern? Join the discussion with other Dollar Vigilantes!

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Anarcho-Capitalist. Libertarian. Freedom fighter against mankind’s two biggest enemies, the State and the Central Banks. Jeff Berwick is the founder of The Dollar Vigilante, CEO of TDV Media & Services and host of the popular video podcast, Anarchast. Jeff is a prominent speaker at many of the world’s freedom, investment and gold conferences as well as regularly in the media including CNBC, CNN and Fox Business.

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"Jeff is a prominent speaker at many of the world’s freedom, investment and gold conferences as well as regularly in the media including CNBC, CNN and Fox Business."

That made me slap my hand over my wallet. LOL Everyone who has more assets than a piddle need to get some real advice that you pay for and whom will be accountable to you and your funds. Geez.

Many will be surprised at where these requirements can raise their heads and cause trouble in your finances. We got caught 4 years ago when the first phase of these regulations began. With a simple medical insurance address change from our US address to our Mexico address to eliminate the need to use network facilities in Laredo we bought a LOT of trouble. The insurer connected to the pension fund alerted the fund to our out of country address whichset off a chain reaction taking months to unravel and required us to prove a negative which is really hard to do. It was assumed we had offshore funds and accounts. Turned out the pension fund had changed its computer system to identify irregularities particular to overseas references and notified the direct deposit bank which then that bank notified the other financial institutions who were direct depositors to our account and everybody notified the IRS who....promptly froze everything in the US.

So you probably have not heard or seen the last of this. Unfortunately.

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Well, there's that point of view, as expressed by an anarchist/capitalist/libertarian. Perhaps a tad biased. Maybe.

Then, there's those naive, smug souls who believe it's because those closed accounts were "piddling", and that it won't happen to them. "And then, they came for me" may apply here.

Then there's the folks who are comfortably ensconced in a U.S. address through a relative and who have the freedom to open alternative U.S. accounts; whose solutions to the problem don't apply to those of us without such addresses and must use our wits the best we can to find a place to put our automatic SSA deposits, figure out how to pay bills sans the U.S. banks and generally, outwit the system set up to drive us bonkers.

At least it ought to keep our brains working in our dotage.

Do you suppose FATCA left a letter off.....the final "T"? You never know. :unsure:

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Well, there's that point of view, as expressed by an anarchist/capitalist/libertarian. Perhaps a tad biased. Maybe.

Then, there's those naive, smug souls who believe it's because those closed accounts were "piddling", and that it won't happen to them. "And then, they came for me" may apply here.

Then there's the folks who are comfortably ensconced in a U.S. address through a relative and who have the freedom to open alternative U.S. accounts; whose solutions to the problem don't apply to those of us without such addresses and must use our wits the best we can to find a place to put our automatic SSA deposits, figure out how to pay bills sans the U.S. banks and generally, outwit the system set up to drive us bonkers.

At least it ought to keep our brains working in our dotage.

Do you suppose FATCA left a letter off.....the final "T"? You never know. :unsure:

FATCA affects MX banks not U.S. banks so why did Banamex USA close accounts? What was his answer for that? If Banamex doesn't want to deal with FATCA then Banamex MX will close the accounts and it hasn't. I think also that the few who think they missed the bullet will also be closed. I think Banamex USA is pulling out of the USA.

Gringal try XE.Com http://www.xe.com/currencyconverter/. You can transfer money to a MX account and get a better exchange rate with no fees. There are people who posted a few years ago that they use XE and are happy with it. XE will want proof of your MX address but I don't think it cares about a U.S. address.

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Thanks for the link, Joco.

Why did Banamex USA do what they did? Good question, but it may well be that down the line, they will be absorbed by Citibank, which has its troubles with the govt. already. Lots of money laundering rumors; lots of accounts shifting the stuff back and forth by people with dubious addresses; lots of possibilities.

Meanwhile, back at the casa, we not only have an honest Mexican address on file now, but going for citizenship is beginning to sound like a grand idea. Getting tired of the confusion and brain-freeze; looking for more simplicity.

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