We are looking at the tax implications of investing in an office building in Texas or California. Knowing that taxes vary by location, we are looking at what tax advantages beyond FIRPTA generally we should anticipate for each location.
Answers
In order to answer this question more specifically, I would have to know more facts. The taxes a foreign investor has to pay may include payment of a transfer tax, depending on the laws and customs of the state. For instance, California has a transfer tax. Payment can be allocated between a buyer and seller. Beyond that, the facts and circumstances of your
ownership, as structured by a competent professional, can create a tax-advantaged position. The investment may be partially debt as well as partially equity. I work with a first rate tax lawyer, who could work with you to devise the most favorable structure. However, earnings and gains
will have some tax consequences.
Beyond federal tax requirements, Texas is 0% while CA depends on other income. Should be easy for your tax attorney to verify.
