A Colombian Fiduciary (Fiducia) is a popular financial structure used in Colombia for managing assets, investments, and real estate projects. While it might look similar to a U.S. trust, the two are not treated the same—especially by the IRS. For U.S. taxpayers with ties to Colombia, misunderstanding this difference can lead to serious tax reporting issues.
This article explains how Fiducias work, how they compare to U.S. trusts, and why the IRS often classifies them as foreign trusts—triggering reporting obligations on Forms 3520 and 3520-A. If you’re investing or managing property in Colombia, understanding the U.S. tax implications of a Fiducia is essential to stay compliant and avoid costly penalties.
