Tijuana

Articles, Tijuana

From Cleaning Crime Scenes in the US to Roasting Coffee in TJ

One of the wonderful things about Baja is the people that live here and the stories they have to tell. I am especially fascinated by the young expats who have decided to leave their home countries and immerse themselves in their local communities, just like regular locals.

Benjamin Davis is originally from Seattle, but we could say that he is a “Tijuanense,” because by now as he has been around here for 15 years. He is happily married to Cynthia, a Tijuana native, with whom he has two children, Rhys and Samantha, both born in Mexico.

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His story starts in Seattle, where he ran a janitorial business that serviced, among other clients, funeral homes. At that point he only did regular cleaning until he was approached by one of the owners of a funerary asking if he could provide cleaning services where someone had died; he was hesitant at first, but after seeing what those kinds of services charged, he went all in.

For 3 years he was cleaning it all with his bio-recovery service (a better name for cleaning after the dead), crime scenes, suicides and natural deaths. Although I immediately thought crime scenes were the hardest part of the job, he tells me the hardest were actually natural deaths, where the dead person was not found until a couple days after dying, leaving an especially hard to clean trail of bodily fluids behind.

In two days of hard work, he was making more money than his dad made in 2 months. “At those times, you could almost charge whatever you wanted for the service, as there were not a lot of providers for the service,” says Ben.

Business was booming, but he says he didn’t feel complete inside, he wanted something else from life. He had been sponsoring a child to go to school in Tijuana through a local Christian non-profit, so one day he decided to give them a call and ask if they needed any more help. They happily accepted.

That’s when he loaded his pickup truck and drove 1,300 miles to get to Tijuana. He started helping kids anyway he could until he founded Didaque ministries in 2009, focused on running the same private elementary school he was supporting from back in Seattle.

Four months ago, Ben decided to embark on a new venture, one that reflected two of his passions: Mexico and good coffee. That’s how he decided to open Ben Tostador de Café (Coffee Roasters), where he focuses on selling in-house roasted coffee beans from the Pluma region of Oaxaca and Veracruz, although he also offers espresso beverages and brewed coffee in his cozy Playas de Tijuana location.

He gets all his green coffee in small shipments directly from the growing regions.

Coffee prices are more than reasonable at 50 pesos for half a pound (actually 250 grams) of Veracruz coffee or 65 pesos for the Pluma, Oaxaca variety.

Drop by his store at Ave. Baja California Sur #688 in the Costa Hermosa section of Playas de Tijuana. He is open Monday to Friday from 6:00 am to 12:00 pm, and then from 2:00 to 8:00 pm, Saturdays from 3:00 to 9:00 pm. He has a Google Maps link in his website, www.cafeben.com.

If you want to help Ben support Tijuana kids in need, visit Didaque’s website at www.didaque.org, They are a fully registered 501(c)3 non-profit corporation in the US, making your donations tax-deductible.

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 Baja Norte, Columns, Ensenada, Rosarito, Tecate, Tijuana

Que Pasa In Baja?

Ensenada city workers going back to work. After a couple weeks of being on a sit-down strike, Mayor Novelo was finally able to convince them to go back to work by promising to pay the remainder of their Christmas bonuses before January 21st.

City workers are pretty pissed off, since the city has had problems paying their salaries, and now their Christmas bonuses, which for them amounts to an extra 2 months’ salary. By law, the Christmas bonus has to be equal to at least 15 days.

When he took control of the city, Mayor Novelo announced that the city was broke; since then, we have seen the effects of it. There are almost no streets in the city without potholes, and trash pickup services have been reduced to almost once a month now.

City workers don’t believe it, though; they say it’s not so much the lack of funds, but rather the inability to properly manage the situations that are affecting the city.

It has been a tough term for Mayor Novelo. He hasn’t been able to catch a break, and most people are pretty unhappy with the crises that the city is experiencing. This is probably the reason  he announced last year that he would not be running for another term.

The amount the city owes its workforce in Christmas bonuses alone is about $3.8 million USD, and this administration alone has already asked for about $11.3 million USD in loans to cover other expenses. This give you an idea how seriously the fiscal situation is for Ensenada.

AMLO comes to Baja. Our brand-new president visited Tijuana this past Sunday in order to announce the newly created free zone for the northern border along with our state governor Kiko Vega.

The president is scheduling visits to different parts of the country on weekends in order to have time during the week to attend to his presidential duties in his office in Mexico City.

He is famous now for travelling on commercial planes and even choosing the cheapest flights for his travel.

Migrants safe from police. Alma Migrante, a local non-profit group that helps immigrants know their rights, has won a trial making it illegal for local police to send immigrants guilty of committing administrative infractions to be sent to the National Migration Institute (or INM in Spanish) in order to be deported.

Representatives from Alma Migrante are stating that immigrants can only be sent for deportation if they commit a crime more serious than a minor infraction.

Although the line could be a little blurry sometimes between the two, an easy way to understand it is that an infraction would require you to pay a fine, but a crime would require jail time.

Snow is here! The civil protection office in the city of Ensenada has announced that both of our local sierras, Juarez and San Pedro Martir, have snow and are open for visits.

As always, they are recommended to drive there in a car in good condition, preferably 4×4, and bring warm clothes and supplies, especially gas and high calorie food, in case you get stranded up there.

San Pedro Martir, which always has more snow than Juarez but is also a farther away, is only open from 7:00 am to 4:00 pm every day, and is not available for overnight stays.

Jaime Nieto, head of the office, stated that the roads are not in the best shape right now, and emphasized the need for a car in good condition if you want to visit.

We’re getting more cruise ships. During 2018 a total of 270 cruise ships docked in Ensenada, carrying more than 650,000 tourists. About 70% of those tourists descended from the ship to visit the city, and they spent an average $54 dollars per person.

Tourism officials are stating that its very likely that we will get even more cruise ships this year, since some cruise liners have already booked more dates for this year. January alone has 26 arrivals in total.

Bring your own bags. Rosarito and Ensenada decided last year to eliminate plastic bags in retail shops and the new measure has been in effect since the first of the year. Steep fines were announced for offending businesses, but at least Rosarito has said that they will not issue fines until April of this year.

It is possible for you to not even notice the change if your favorite store decided to switch to paper or biodegradable plastic bags (which are almost indistinguishable from normal plastic bags). This will still be legal and an option for businesses if they want to keep offering customers this benefit.

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 Articles, Baja Norte, Ensenada, Rosarito, San Felipe, Tecate, Tijuana

Welcome To the Northern Free Zone

One of the campaigns promises that gained more supporters around here for our new president, Andres Manuel Lopez Obrador (or AMLO for short), was the proposal of a new “Free Zone” along the northern border that would reduce taxes, increase the minimum wage 100% and lower fuel prices to try and match those in the USA.

Since the first day of the year, this promise has become a reality, and you are now living in the new free zone for the northern border.

So, what does this mean for you? As a consumer, this means that you will now be paying 8% IVA on most products and services instead of the 16% you usually pay. For those of you unfamiliar with IVA, that’s the Mexican equivalent to the VAT in the US. Note that I said most; I will explain that later.

If you have a business, you will also have another benefit: Instead of paying the usual 30% on the ISR (income tax), you will now be able to receive credit for 10% of that. This means that you will only be paying 20% now.

Regarding gas prices, we have already seen some gas stations lowering their prices, since they have a special benefit in that they won’t be charging any VAT on gasoline and diesel; this reduced gas prices to exactly 16%. This reduction doesn’t actually match it to prices in the US, but it definitely closes the gap a little bit more.

Minimum wage was doubled to $176.72 pesos per day (about $9 USD); the older wage at $4.50 was a joke, and almost nobody was working for that.

Since the newly created Free Zone is defined by a decree and not a law, businesses must register for it and they will have to meet certain requirements; therefore, don’t shout bloody murder if you see 16% IVA in your ticket, since there is a possibility that some businesses don’t meet the requirements or just haven’t applied yet.

In order to be able to obtain the benefits businesses need to prove that at least 90% of their total sales are from the border region. They will also be asked to prove that they have a valid address in the region for at least 18 months. These two requirements are key in discouraging mainland businesses from establishing an address in the border just to obtain said benefits.

Businesses that are already established have until January 30th to file their application, and newly established businesses will have 30 days after registering their businesses with the SAT (which is the Mexican IRS).

The free zone objective is to increase competitiveness with the US, avoid migration and make it more attractive as an investment option.

If you were here back before 2014 you might remember that we already had lower taxes here in the border, but that benefit was removed by president Peña Nieto. At that time VAT in the area was 11%. This means that taxes now will be even lower than at that time.

Several analysts say that Northern Baja will benifit the most  from this new decree, as the biggest percentage of the population in the state lives near the border, and because all its municipalities are considered part of it.

For now, the decree will be valid only for 2019 and 2020. Surely, results will be analyzed after these two years and a decision will be made on whether to extend it or not.

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 Breaking News, Ensenada, Rosarito, San Felipe, Tecate, Tijuana

Watch out for those Santa Ana winds

Health authorities from Baja are recommending staying at home when Santa Ana winds are active. Problems in the respiratory tract, eyes and skin have been reported during the winds, and thus they are recommending staying home with doors and windows closed.

Dr. David Perez, chief of medical services, stated that these winds affect the health because they carry a lot of dirt with them because of the severe dryness. He also recommended to stay away from street food during this condition, as it can get easily contaminated by pathogens in the wind and can induce gastric diseases.

Perez emphasized the importance of drinking enough water and making sure house pets have enough clean water, which should be changed more often to avoid having them drink contaminated liquids.

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 Columns, Ensenada, Fish Report, Rosarito, Tijuana

Fish Report

Tijuana Bull Ring

Local action has been slow recently — not many bonito or bass, and just a fair number of little rock fish. Out west in the flats, however, the skipjack fishing has been great.

Coronado Islands

After a month or so of very little action, the 10- to 15-pound yellowtail are back on the bite.

The word we have is that yellowtail were seen on the rockfish area just to the NE of North Island and were taking the 6x jr., 6x and 7x yoyo iron, fished on 40- to 50-pound monofilament. Scrambled egg and blue/white were working well also.

Along with the yellowtail, a bunch of 4- to 6-pound bonito were seen spread out along the weather side of North Island.

Offshore

Captain Louie Prieto shows off one of the better-quality sheepshead caught on a recent outing.
Captain Louie Prieto shows off one of the better-quality sheepshead caught on a recent outing.

Below the 425 / Upper Hidden & Hidden Bank

This zone continues to be the best bet for yellowfin, with the most productive area being below 32.06, down in the Upper Hidden Bank area.

There is a temp break running east/west at that number. Temps are below 68°F, and to the north of it as well as 68°F to 69°F to the south.

The yellowfin, skipjack, yellowtail and dorado have nearly all been kelps now with not a lot of open-water jig stops happening.

The average-size yellowfin has been small, mainly from 6- to 10-pounds, with a few up around 20-pounds. The skippies were in the 5- to 8-pound range. The yellowtail have been little rats, from 1- to 3-pounds and the dorado have been small as well, from 5- to 10-pounds.

Lower 9 / Coronado Canyon / 425 / Upper Hidden / Hidden Bank

A couple of boats went exploring and checked out this area today. They didn’t find a lot of fish — in fact, most of the area was a barren desert, but they did find a couple of kelps which produced good numbers of yellowfin and skipjack along with a sample of rat yellowtail.

295 / 238 / 450 / 1140 Finger / Lower 500

Still the location where the biggest scores of yellowfin were coming from, but with a catch: 95% are on kelp paddies.

Easy limits of 6- to 35-pound yellowfin, along with some skipjack, yellowtail and a lone dorado were caught recently.

Most of the area is a desert now as well, with lots of dead water; but be sure and check out any kelp or any dolphin you run into, because these could be holding yellowfin.

Ensenada

Captain Louie Prieto checked in, reporting that for the last couple of weeks, yellowtail fishing has been spotty, but the big bonito and bottom fish have been biting full speed. Water was 63°F to 66°F inside the bay and has been flat and calm most days.

Several high spots at Bahia Salsipuedes were producing sand bass to 7-pounds, reds and chuckleheads to 5-pounds and one nice 23-pound sheepshead on a large root beer colored scampi tipped with squid. Best action was in 120- to 150-feet of water for all the bottom fish. There were several nice bonito on blue and white salas 6x jr. between Punta Pescadero and the Gas Plant. No birds were working anywhere in the bay, but when bait was found on the meter, the bonito have been found as well. Also, lots of bonito are reported a couple of miles inside of the southern end of Todos Santos Island. None of the deeper “go to” spots seem to be holding any yellowtail yet. Only a matter of time until they show. Live bait is not available until probably April, so bring squid.

San Quintin

Only a few groups recently. Troy Hutton, plus some amigos from Lake Arrowhead, Calif., found excellent action fishing aboard Captain Kelly Catian’s 25-foot Parker Offshore III, scoring a mix of yellowtail, big red rock cod and lingcod.

Bahia de Los Angeles

Currently, in a November tease mode with nice weather and only moderate breezes in the afternoons, most if not all the yellowtail action was dropper loop stuff, fishing at depths of 200-feet or so around the Islands. Cabrilla, grouper and pargo was also in the mix closer to shore. So far, north winds have not cranked up to full winter mode.

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 Articles, Baja Norte, Ensenada, Real Estate, Rosarito, San Felipe, Tecate, Tijuana

Mexican Land Trusts, Big IRS implications

I was intrigued by a recent presentation by a Mexican bank on the subject of Fideicomisos (land trusts). By way of a quick primer, ownership of real property in the “restricted zone” (100 km from borders, 50 km from shore) by a foreigner must be done through a Fideicomiso.

As it turns out, Mexican banks have a monopoly on this Fideicomiso business. The bank’s role is to hold the title to property on your behalf. One can direct the disposition of the property; sell, give away, or otherwise encumber the property. ‘Fidos’ are good estate planning vehicles from the Mexican perspective. At death, the property is transferred via the trust, perhaps a more efficient mechanism than Mexican probate.

Some banks appear to be pulling out of the “fido” market. When I asked why, I was told there is increased emphasis on anti-money laundering compliance by bank regulators, which to me means there may be a new spotlight on this market segment.

One of the reasons I attended was to see how much awareness there was on the part of bank officials on the federal income tax aspects of Fidos.  None. Zilge-ola. That means you, the person who may need to enter into a fido to own property, must pay special attention, because the bank won’t tell you.

Here’s the rub. What may work from a Mexican perspective may be sheer disaster from a U.S. tax perspective. Properly structured fidos (meaning they meet IRS requirements) are deemed to be “disregarded entities,” and the IRS will not bother you. When they are not, they become IRS ‘radioactive’. They become reportable foreign trusts. Every time there is an IRS reportable ‘anything’ you have better had done it right from the beginning.

“Good” fidos have only one property in them.  At the presentation it seemed like it was common to add more than one property per fido. Again, ok from the Mexican point of view, but runs afoul of IRS ‘safe harbors’. In fact, bank officials later confirmed they gladly would add properties to an existing fideicomiso, for a fee.

Another trait of “good” fidos:  They do nothing but hold title to property. Be wary of the bank doing other things for the property; managing it, paying taxes or other things. The IRS does not like that.

Food for thought:  New owner, new trust, or just substitute the name? Does one inherit the federal tax troubles of the last fido owner?

Orlando Gotay is a California licensed tax attorney (with a Master of Laws in Taxation) admitted to practice before the IRS, the U.S. Tax Court and other taxing agencies.  His love of things Mexican has led him to devote part of his practice to federal and state tax matters of U.S. expats in Mexico.  He can be reached at tax@orlandogotay.com or Facebook: GotayTaxLawyer.  This is just a most general outline. It is informational only and not meant as legal advice.

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