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Anyone out there know anything about IRS form 5471. As a US citizen having to report ownership of a foreign corp. i.e. Costa Rican SA ownership. Do we file on our returns that our property in an SA?
Legal advice is not given here. But I am not a legal professional so I can report, as a layman, that I have read that if you own 10% or more in an S.A., whether or not it is profitable, you are SUPPOSED to file. I can’t find any provision that states the S.A. is exempt just because it is used exclusively to hold property. But you need to ask a professional questions like this. And let me add that I wish anyone well who is able to avoid having their money illegally confiscated by an evil government.
Thanks for your imput. Its saturday night and I didn’t have a legal pro around to ask so tryed here. I will follow through. I wonder how many people have bought property in CR that are US citizens and do not file because they don’t tell their accountant that the property they own is in a SA.Or think that an SA can not be detected. We all hate paying taxes but an audit is worse.
Straight from the horses mouth… http://www.irs.gov/instructions/i5471/ch01.html#d0e51
I guess I need to file one too…
JerryThere should be a tax benefit to go along with land investment as well. The costs of any trips made to CR should be deductible.
I haven’t filed those forms but I guess I will next year. After reading the IRS code, it would seem that we all file under the Dormant Corporation requirement, right? My SA is inactive, according to my lawyer, and I know we’ve gone round and round on this issue of whether those inactive corps (SA’s) have to file income tax returns in CR. Sheesh. I was trying to uncomplicate my life by moving to Costa Rica. Guess not.
The Great country of the United States will stick it to anyone they can anyway they can. With the passing of CAFTA I’m sure they will find a way to Tax Folks from Costa Rica because of an “affiliation” now legal to the U.S. This government is in such bad shape that they will go to all ends to take until we rebel….as was said before Elephants are rampid in the U.S
Terry CookWhile on this subject, all US persons with foreign bank accounts amounting to an aggregate sum (add up the money in ALL your foreign accounts) of $10.000 or more at any time during the year might want to do a search on these letters and numbers:
TD F 90-22.1
Edited on Nov 26, 2007 12:19
With all due respect, the US tax system has been going downhill since it was started. I am afraid that US citizens have traded their rights along with their accountability to the government by electing more and more big government folks. One of the great attractions of CR is that they seem in many ways to be moving toward truer democracy while the US seems to be moving toward socialism. I am not sure what you mean by the Elephants, but I am sure many who deal with economic trends and investment as I do would agree that this propensity for big government and higher taxes used to be the mantra of the donkeys in the US…but the infection is spreading.
Understanding that I am not an expert in this area, I do deal extensively in Latin America and other parts of the world which necessitates some basic understandings. In most instances we have found that an S.A. is not appropriate for someone who is a citizen of the US or subject to the US tax laws. I would urge anyone purchasing property or starting a business to utilize one of the recommended attorney offered by Scott Oliver. I believe Scott also knows our attorney, Ricardo Cordero, with NCC Abogado in Escazu. This is not a pitch for an attorney, but a suggestion that an ounce of prevention is worth a pound of cure. There are structures that are more tax efficient depending on what you intend to do. Warm Regards.
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