Not sure if anyone got back to you but I am taking a look at this one with [cencored due to company repeatedly spamming the forum with shill accounts]. They sent over spreadsheet and management contracts to review. Well known hotel chain will be running it. Did you end up taking a look at it?
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Hey, Jeff, I would mention FBAR reporting obligation which raises upon transfer of the funds to your (new) Portugese account. Otherwise yeah, Mercan deal is a āno-incomeā scheme, which make is easier on US people.
What Iām still wondering if one can benefit from any tax benefits of selling it at loss? IE bought for 300k, appreciated value in 6 years, say, 500, thus 200k loss 
In most cases there probably will be no FBAR requirement. You should not need to actually create a bank account in Portugal. If there is no bank account, then there is no financial account to report on a FBAR/8939. Merely transferring money to another entity offshore is not a reportable event - at least not for you; your bank may report the transfer as part of KYC and general auditing requirements, but itās not incumbent on you to report anything.
If you buy it for 300k, and it appreciates to 500k, what loss are you taking to be able to report? Not really following.
If there is an actual loss, then itās like any other investment loss, in this case most probably a long term capital loss, offset somewhat by the 3% annual rental income, assuming you get it.
Hey, Jeff,
Iām talking about Mercanās guaranteed buyback option. Buy for 280k sell for 280k. The model they use - you have to open a bank account in Portugal, so their lawyers can draw money from it to perform a purchase. I donāt know of an option to process this sale without having money in Portugal, but even if there is it doesnāt sound to be feasible with Mercan.
Regarding loss, Iām realizing now that it wonāt be possible to deduct the 500-280k difference, if I sell it below 500k (market value) and above 280k, as technically thatās not a ālossā from the original 280k standpoint.
I think that depends on who owns the offshore company. If the context on this scenario of a minority owner in a hotel development, you are probably correct but good to be aware.
Specifically, I would look at the section on transferring cash; however, other assets such as crypto-currency would also be considered property.
Transfers of cash. A U.S. person that transfers cash to a foreign corporation must report the transfer on Form 926 if (a) immediately after the transfer, the person holds, directly or indirectly, at least 10% of the total voting power or the total value of the foreign corporation; or (b) the amount of cash transferred by the person to the foreign corporation during the 12-month period ending on the date of the transfer is more than $100,000. See Regulations section 1.6038B-1(b)(3).
I take your point, but in the case I think there is a difference here between ātransfer property/cash to a foreign entityā and āpurchase goods or servicesā. If it were the latter, the entire framework of international trade would instantly gum up. (Admittedly we already gum up stuff with 1099s internally and maybe thatās the point as a result of recent changes, but I doubt it.)
That said, I didnāt read the agreement well enough. Youāre right, there is built into it the transfer of a significant sum of cash to a foreign corporation. If it were a straight goods-and-services arrangement, then I still think the goods-and-services viewpoint would apply and it wouldnāt matter; itād be no different than hiring a GC to build your house. In many ways it really is that. However, because PO / RA (the Mercan operating companies) are not actually GCs, and itās associated with a joint owner thing with a proxy arrangement, itās clear as mud. Iād ask my accountant, but heād want an hour or two of time to research the matter, and Iām not going to pay $300 to answer the question even for the good of the community, especially when it involves someone elseās tax situation for which none of this is worth more than what you paid for it and the prospective investor should ask their own accountant who is the one defending them to the IRS later. 
And if they are making you open a .pt account, the FBAR question is moot. The only obvious reasons for needing a .pt account would be paying SEF, and your lawyer could do that for you. (Mine does.) However, all of the entities involved may prefer you to have a .pt account for their convenience, in which case youāre done.
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I dont want this thread to become a boring tax thread so I will leave it at that. Suffice to say that its another example of US treasury over-reach that makes it impossible for a lay person to understand how to file their taxes.
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Not a problem, done
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mtron, can you please share the 3 qualified law firms with me? Iām looking for additional guidance on investments and on the entire process. Thank you so much in advance.
Hi Melanie, kindly share the 3 qualified law firms with me. D7 may be the route I would take.
Iām working with Mercan and IAS. Does anyone have any negative/positive experiences with either of these?
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Did anyone invest and got the GV?
Or maybe you know of threads from people whoās getting buyback/income already?
Please share!
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Can you give us an update about your process with Mercan group? Just read the whole thread and it looks like youāre the only with any experience. I couldnāt find the PM button. 
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Hi, Melanie, If youāve been sharing attorney resources for the real estate GV, Iād love same names. I talked to one I like, but would like to do some quick research as weāre entrusting them with a lot of 
. Thanks!
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I have listed all the lawyers I interviewed and my thoughts on each in the lawyers tab of this sheetā¦
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Hi Larry, we are trying to decide on funds investment (most likely what will do) or possibility of Mercanā¦but from what you and others have said it may not be possible with construction delays, etc. Did you end up doing a fund investment for the 350? If so, how did that go - would like to hear your story. Perhaps we can IM? We are in the US - family of 4. Thank you, Laura
Did you get a third party to review all of the paperwork? Iām very close to making a decision and signing w Mercan but wondering if we should have an independent attorney review the paperwork? Also, have you gotten an app w SEF yet for biometrics? Thatās my other concern
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