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Property Owners > Archived Newsletters > JANUARY/ENERO 8, 2008 -

Costa Maya Newsletters: of primary interest to property owners on the Costa Maya, - Mahahual / Mahajual - Rio Indio - Placer - Uvero - Punta Herrera - Xcalak and other points along the coast

***********************Newsletter:Jan. 8. 2008**************************

CONTENTS:

  • Message Board discussion: Tabano - what's your experience?
  • U.S. Expatriates and Filing of US Tax Returns
  • Veterinary Clinic in Mahahual and Xcalak
  • Papaya
  • Watch for that turnoff
  • News from Mahahual
  • News from Xcalak
  • Good Post-Dean News from Bacalar
  • New and improved - vacation rentals!

Hi Neighbors

In this area of Mexico, there is a nice tradition at New Years involving grapes. While drinking is involved, of course, more importantly, it is the opportunity to look toward the new years with hope. Everyone takes 12 grapes -- big juicy grapes that are over an inch across- each representing a month in the new year. Each grape is associated with a wish. At midnight, everyone eats the grapes. If the grape is sweet, the wish will come true. There are some variations of this theme, where resolutions are combined with wishes, but the concept is similar. I'm happy to announce that all my grapes were sweet as can be! We hope all of your wishes for the new year come true!

Mayan Beach Garden opened this year with lovely guests and renewed traditions. We ate traditional Bacalau for Christmas Eve in the Restaurant and then roasted turkey and the Christmas roast for Christmas day dinner. On Jan 6th (Epiphany) we ate Rosco de las reyes and dunked it in chocolate milk. We hunted furiously for the trinkets hidden in the bread and celebrated when they were found. It was nice to be in business again, meeting old and new friends and celebrating traditions, new and old. Already the new year seems more positive with lots of activity, many mentioned below. Most of the hotels in the area were full - a testament to the fact that life continues without the cruise ship. I actually enjoy going into Mahahual now. I know people are poorer this year because of less business, but I think there are more restaurants now than there were pre-dean. This is a great time to visit Mahahual. Don't wait until the cruise ships come back!

The online version of this Newsletter can be found at: http://www.mayanbeachgarden.com/PropertyOwners_Newsletter07_Dec.html (includes some pictures)

MESSAGE BOARD DISCUSSION: TABANO - WHAT'S YOUR EXPERIENCE?

Most of us have been bitten by Tabanos at one point. If you don't know what a Tabano is, it is the pesky yellow biting fly from the family Tabanu. They are similar to Green heads, dear fly and the much larger cousin - horse fly. Since the hurricane, there haven't been too many of them, but they still exist here and there. Anne Guerin, who has been here many times has recently had a bite and is looking for remedy's. At one time, I was severely allergic and thought I could never go outside in the months of June - August. Thankfully, I grew immune to the nasty things.. If you have an experience or can give some remedies for Anne, please chime in!
Message Board topic : Tabanos

US EXPATRIATES AND FILING OF US TAX RETURNS

The following article on "US Expatriates and Filing of US Tax Returns" is valid for anyone moving out of the US on a permanent basis and comes from Glazer Financial Network. It should be of special interest because the IRS and Hacienda (the Mexican equivalent) have plans to share information in the near future. Hacienda is now fully computerized as of the beginning of 2007, so this may come soon.

"One of the major issues that faces anyone when moving out of the country and becoming an expatriate is the filing of US tax returns. Numerous US citizens and lawful permanent residents (Green Card Holders) move to a foreign country and forget or choose not to file a tax return.

The US requires an accounting based on worldwide taxable income when residing in or outside the United States. This could become a major issue if a person chooses not to file their tax return. The statute of limitations never runs out. Therefore, if you live abroad for ten (10) years and then return to the United States, the penalties and interest may exceed the actual tax.

Section 513 of the Health Insurance and Accountability Act (Pub. L. 104-191) directs the Secretary of the Treasury to make sure that citizens and lawful permanent residents, residing outside the United States, comply with the US Income Tax Law. The Internal Revenue Service is working with the Department of State and the Immigration and Naturalization Service to improve this compliance.

However, a US Citizen or Resident Alien need not file a tax return unless the gross income equals or exceeds certain minimum amounts. For 2006, that amount is $16,900 for a married couple filing a joint return. If one spouse is over 65 years of age then the amount is $17,900. If both spouses are over 65 years of age then the amount is $18,900. The amount for a single individual is $8,450. If the single individual is over the age of 65 years than the amount is $9,700. The amount for a head of household is $10,850. If the head of household is over the age of 65 years then the amount is $12,100. The amount for a qualifying widow or widower is $13,600. Other things to remember is if you have W-2 income withholding tax or self employed income where self-employment tax is due.

Even if required to file a return, the foreign earned income exclusion and housing exclusion and deduction, currently for 2006 up to the amount of $82,400 and living expenses in excess of $34 per day respectively, plus the foreign tax credit, could reduce or eliminate the US tax liability. If married and you both earn income, each of you can exclude up to the amount of $82,400.

If you are self-employed and no foreign social security is being withheld from your earnings you must file a Schedule C with your US Tax Return and pay US self employment tax on your net earnings after deducting your expense. The self-employment tax is 15.3% and is not reduced by the foreign earned income exclusion or foreign tax credits.

If you own more than a 10% ownership in a foreign corporation you are required to file a special form reporting that interest. If making a profit, it will be a “controlled foreign corporation” and you could owe US tax on its earnings.

If you are a beneficiary or trustee of a foreign trust, (i.e., Fideicomiso) or have a bank account with a balance over $10,000, you must file a special form.

Failure to file any of these forms can result in penalties up to $10,000 or more and can be assessed many years from now when the US, IRS and Mexican Hacienda finally start sharing more information. You can also be liable for individual state income taxes.

Code Section 911 dictates the deductions from gross income and also the foreign housing costs paid on behalf of or housing costs paid by the individual that are in excess of a base amount. These items need to be filed on Form 2555 or 2555 EZ. A very important item is that the Internal Revenue Service has tried to explain the necessity to file even if the income earned is less than the excludable amount.

Code Section 901 allows US Citizens and long-term permanent residents to take a credit for taxes paid to a foreign government. This is reported on Form 1116. Almost 50% of individuals filing show no tax liability because of the two codes, Sections 901 and 911.

There is a special tax on former citizens and long-term permanent residents whose principal reason for moving to a foreign country was the avoidance of US Income or Estate and Gift Taxes. Section 877 imposes this tax regardless of intent.

Expatriates who have a net worth of $500,000 or more (adjusted for inflation) and have a net average annual net income tax liability of $100,000 or more for the five years preceding expatriation are subject to this tax. All expatriates who are subject to this tax under the code has to submit a statement of residence and citizenship and a statement of assets and liabilities.

Code Section 877 also provides a limited class of expatriates to submit a ruling request to avoid this presumption. “This class consists of the following:

  • Expatriates who were dual citizens at birth who have remained citizens of the second country;
  • Expatriates who at the time of expatriation were citizens of their country of birth or the country of birth of their spouses or of either of their parents;
  • Expatriates who for the 10 years prior to expatriation were present in the United States for no more than thirty (30) days in any year; and
  • Expatriates who renounced US citizenship before attaining the age of 18 ½.”

The Internal Revenue Service has initiated many programs to identify non-filers and improve compliance. In the Middle East alone there was s 51% increase in the number of returns filed because of compliance programs.

They also created Form 2555EZ to simplify filing and revised Publication 593, tax highlights for US Citizens and Residents going abroad to encourage taxpayers to file.

In addition, Publication 519, US Tax Guide for Aliens and the instructions to Form 1040 NR to make former citizens and long term resident aliens aware of their potential tax liability under Section 877.

There are also many programs that the Internal Revenue Service has instituted to identify non-filers. Eventually you will realize that you will be identified as a non-filer, so the best idea is to file. The Internal Revenue Service is improving compliance and is constantly looking for methods to improve filing for individuals who reside in a foreign country.
If the reason for becoming a foreign resident is tax avoidance then Section 877 might be invoked. Assets over $500,000 and an average income tax liability of $100,000 over 5 years allows the government to assume that tax avoidance is the reason for being an expatriate.
In summary, the United States taxes its citizens on their worldwide income regardless where they live. The end result might be zero tax but there is a definite requirement to file a tax return.

VETERINARY CLINICS IN MAHAHUAL AND XCALAK

Finally, Free veterinary clinics are scheduled in Mahahual and Xcalak. The dates in Xcalak are January 13-15 and January 16-18 in Mahahual in the Casitas. This is sponsored by the humane society of Mexico with foreign volunteers. Many local establishments are donating housing for the volunteers. If you are in the area and know of any dogs that could use shots or Spay and Neutering -- please bring them to the clinic. Please do not bring dogs that may belong to someone else. They will take strays, but if they belong to someone else, you will need their permission to treat the dogs. I plan on taking some of the Construction site dogs into town on one of those days.

PAPAYA (CARICA PAPAYA)

Native to the lowland tropics of South America, Papaya is now cultivated world- wide. Pre-Dean, Mayan Beach Garden had several of them on the property and you will find trees growing along the side of the roads everywhere, many towering over shorter jungle trees.
The tree grows easily from seed and reaches 20 - 30 feet quickly. The fruit can grow to be huge, dangling from the main trunk. Although the size of the fruit seems to be directly related to the amount of water it receives early in the process. Mexican papayas produce fruits weighing up to 10 lbs (4.5 kg), on much larger plants.

The fruit on my wild Papaya tree was light orange, while most of the ones you purchase in the stores are much darker and reddish in color. The taste is different depending on the variety you plant.

Like avocados, Papayas will ripen off the tree at room temperature. Here in the Yucatan, they score the skin to speed up the ripening process. They never chill papayas until they are completely ripe. The young leaves are sometimes eaten like spinach, although I've never tried it. The unripe papaya fruit and the leaves are the source of papain, an enzyme that digests protein and that is used as a dietary supplement to aid in digestion. Papain is used as a meat tenderizer, to clarify beer, in the processing of natural silk and to give shrink resistance to wool. Who would have guessed! And it grows in the sand!

Papaya requires a male and female plant. Its pretty easy to tell the difference. The male has lots of small white flowers on stems while the female has large flowers along the trunk. They like plenty of sun and the fruit is sweater when grown in the sun. The Papaya plant is short lived - only producing large fruits for one year, and thereafter only small fruits.

WATCH FOR THAT TURNOFF

A downside of the aftermath of the hurricane is that the road signs are down and therefore it is possible to get lost - we just had someone drive all the way to Bacalar before they noticed they had missed a turnoff (AND they owned property and had been here many times!). The first noticeable sign down is on 307 at the turnoff to Mahahual. This is approximately at km 64, but because of construction, that km marker may be missing. Make sure you look carefully after the town of Limones. It is the first major intersection to the left after you leave the town.

The second notable sign missing is the sign at Tampalam turnoff. This is the first left hand turnoff you come to on the Cafetal-Mahahual highway, but it is unmarked. It is right after the gas station, but it too is missing signs. In fact, the gas station looks closed because of the storm debris that has yet to be cleared. No fear, it is open 24 hours despite a lack of lights and signs.
Please warn everyone you know so that people have a positive visit to the Costa Maya. Getting lost is no fun!

NEWS FROM MAHAHUAL

Malecon: The vision of the Mahahaul Malecon is nearing reality - and its not a bad reality if they don't over do it. The sea-wall portion of the Malecon is about done and hundreds of new palms have been planted. During the holiday season, most of the restaurants along the beach were open and serving meals. The town was crowded with locals vacationing on the beach. The waiters would serve meals, crossing the malecon's trench via boardwalks. It was great -- the beach was clean, wide and full of plastic tables, chairs and umbrella stands. Hopefully they will stop before the project gets out of hand, but right now, it looks like a pretty good vision! Look for property values in the town of Mahahual to sky-rocket after the Malecon is finished.

New access roads: It has always been painful going into Mahahual because of the condition of the roads and especially during cruise ship visits. New roads are nearing completion that enter Mahahual from Cafetal. Expect more topes to slow traffic down as you approach these new accesses. The roads are well on their way to completion and quite wide. Can't wait!

Cruise ship pier: This is really progressing rapidly. You can see the pier inch out daily. We haven't heard any new reports of completion dates, so assume the September 2008 date is still valid and at the rate it is going looks likely to make it. We have heard reports that the cruise ship will anchor off shore and the passengers will be tethered to Mahahaul as early as March, but that hasn't been confirmed.

Power lines stolen: For many years there has been power lines to Uvero Beach club. The power lines extended from the power station at the Tampalam junction to Uvero. After the Hurricane, the lines were rapidly repaired, but there was nothing at Uvero to connect to --no power usage. Within two weeks, someone cut most of the lines and stole the wire. After the hurricane, many copper pipes were stripped from homes as well. My workers say the price of copper line is $100 pesos a Kilo of copper, while copper pipe is only $30 pesos a kilo.

NEWS FROM XCALAK (From Paula Preston this month)

"Polly is very busy this month with her Vet Spay and Neuter Clinic project that is coming up January 13 - 15th so she asked me to say a few words about Xcalak. The Holidays were lovely. Both "the Leaky Palapa" and Toby and Moses's "Caribe Restaurant" had great Christmas and New Years dinners and there was a rockin good party on into New Years Eve upstairs at the Caribe. The resorts are very busy and except for some chilly (for us) weather which folks have patiently waited out.. . I have been deeply involved in a project that has finally come to fruition. It was a quilt that was created over the last few months and then raffled. I asked for decorated squares 6x6. I got drawings, paintings, embroidery, appliquéd and photo copied on fabric squares and then assembled them. They were done by families in the village, tourists, locals and part timers who had them sent down with other folks who came for the holidays. People bought chances at the different stores and restaurants and via pen pal. Yesterday we had the drawing and Joe and Sue McDowell who have a real estate office in town won the quilt. I hope they consider hanging it in their office for all the town to continue to be able to see and be proud of and contemplate what they will do for next year. The money we made will be used by the parents association to help with their Computers for Kids project. We are asking folks to recycle their used lap tops and bring them down here for the kids to learn on.
I am glad Mayan Beach Garden is up and running. It is so beautiful that everything is leafing out and blooming. Have a wonderful New Year. Peace, Paula "

GOOD POST-DEAN NEWS IN BACALAR

One of my workers who lives in Bacalar had is home destroyed by Dean. He lived on the poorer side of town, but what the wind didn't destroy, the large tree that fell on it did. He now is the recipient of a new home - courtesy of the government and completely free! Over 1000 homes were completely or partially destroyed during the hurricane. Now 700 owners have new concrete homes with bathrooms. These 4 meter by 8 meter structures are hardly luxurious, but provide safe places to go in the event of future hurricanes. They all have concrete roofs but individuals will have to finish them. I applaud the Mexican government for doing this. I don't know if the homes are paid for by the federal or state government, but it appears that the promises made after dean were fulfilled. How novel!

NEW AND IMPROVED VACATION RENTALS

Many vacation homes reopened this Christmas vacation due to Herculean efforts on the part of owners. Despite the damaged area -- the guests were great and most enjoyed the opportunity to really get away from it all. The beaches are better than ever and many property owners took the opportunity to improve their homes, adding things they didn't have before and taking renewed interest in their properties. Beau and Kitty Speed added a third bedroom to their vacation rental and we added more spacious decks and kitchenettes. There is also have a new home - Oasis Rio Indio. Rentals are starting to pick up again after being very slow after Dean. That's good news for everyone! You can view pictures of the new rentals at http://www.mayanbeachgarden.com/Rental_Homes.html.

Oasis Rio Indio - Brand NEW! check out this property!
La Brisa: Newly remodeled - opened for Christmas!
Casa Porto Vino:- Costa Maya's most spectacular property
The Jollymon: cute economy Villa
Casita Dragonfly:
Villa Costa Maya

DISCLAIMER

The editor of this newsletter (me) makes no claims that the information here is completely true. I am not a news reporter, Spanish is not my native language, the newspapers are notorious for not verifying information and this is not my primary business, but rather a service to the neighborhood. If you find something untrue PLEASE let me know and I will print a disclaimer. I try to verify the information but even the newspaper prints up rumors, so I can only report what I read and hear.

Unless otherwise stated, all content is copyrighted by MMB Contractors Inc.

THANKS!!!!!
Until Next month...

Regards from your Costa Maya Neighbor
Marcia
Mayan Beach Garden, Boutique hotel on the Costa Maya
www.mayanbeachgarden.com

 

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Updated: 16-Mar-2009

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