USA – TEXAS Law and Practice Contributed by: Perrin Clark and Meredith McIver, Ytterberg Deery Knull LLP
1.7 Transparency and Increased Global Reporting Following recent US federal court decisions and the election of the current administration in the United States, the effect of the Corporate Transparency Act has been dramatically curtailed. US companies and US persons are now exempt from filing beneficial ownership information (BOI) reports; however, foreign companies generally still must file BOI reports with the Financial Crimes Enforcement Network (FinCEN). FinCen also requires residential real estate reports for non-financed transfers of residential real estate to cer - tain entities and trusts, but such reporting has been suspended pending litigation. FinCEN Form 114, commonly known as FBAR, is required for US persons owning interests in foreign financial accounts. Foreign financial assets are also reportable on Internal Revenue Service (IRS) Form 8938. Additionally, US persons transacting with for - eign trusts or receiving gifts from foreign persons may be required to file a Form 3520 with the IRS. See 3.4 Tax Consequences of Fiduciary and Beneficiary Roles . In Texas, certain information becomes publicly avail - able in connection with the formation of an entity, including the identity of the governing person(s) of the entity. In addition, each taxable entity formed as a corpora - tion, limited liability company (LLC), limited partner - ship, professional association, and financial institution that is organised in Texas or has a nexus in Texas must file a Texas Franchise Tax Public Information Report (PIR) annually. Certain information from the PIR may be disclosed on the Texas Comptroller and the Texas Secretary of State websites. 2. Succession 2.1 Cultural Considerations in Succession Planning The United States is in the midst of the largest inter - generational wealth transfer in the country’s history. With the retirement and eventual death of the “baby boomer” generation, more wealth is transferring from
may be undertaken to address federal taxes. Pre- immigration strategies generally involve restructur - ing or transferring assets before becoming subject to applicable federal taxes. They also may include adjusting foreign trust structures to make them more tax efficient from a US perspective following immigra - tion. Exit planning strategies generally involve exiting the United States before becoming subject to an exit tax or, if an individual already has become subject to an exit tax, restructuring or transferring assets before exiting in order to reduce the impact of such tax. They also may include adjusting domestic trust structures to make them more tax efficient from a US perspec - tive following exit. 1.5 Taxation of Real Estate Owned by Non- Residents and Non-Citizens Pursuant to the Foreign Investment in Real Property Tax Act of 1980 (FIRPTA), any disposition of a US real property interest by a foreign person is subject to US federal income tax withholding of 15%. In addition, rentals from US real property are US source income and when earned by a non-resident alien are subject to US federal income tax withholding of 30%; pro - vided, if rentals are considered “effectively connected income”, they are reported on a US income tax return and are not subject to withholding. No state or local taxes are assessed specifically against non-residents and non-citizens in Texas. 1.6 Stability of Tax Laws US federal income tax law and policy can vary sub - stantially over relatively short periods due to changes in the political landscape of the United States. Howev - er, the 2025 passage of the One Big Beautiful Bill Act made permanent the inflation-adjusted transfer tax exemptions and individual income tax rates. Absent congressional action to change these “permanent” laws, the federal tax laws applicable to individuals may be entering a period of relative stability. State and local tax on individual income is prohibited by the Texas Constitution. Recent changes to the Tex - as Constitution also prohibit state-imposed wealth, capital gains and transfer taxes. In light of this, tax laws in Texas appear stable.
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