Texas Real Estate Articles

Months after setting up my LLC David Willis continued to answer questions and provide guidance, usually within a matter of hours. I would strongly recommend LoneStarLandLaw to any investor seeking a trusted business partner.

Client Robert H

I must say your articles always impress me. I like your style. I don't make it to Houston often, but next time I do, I owe you lunch.

Dallas Attorney Matthew Aycock

I would be happy to provide a testimonial although it looks like you have a long list of them already. Can't thank you enough. I'll definitely use your services in the future.

Client Ben P.

Your book is a terrific resource!

El Paso Attorney Kathleen Crook

Your book is a very easy and informative read. I will gladly and confidently refer clients to you.

Houston Attorney Kevin J. Smith

It is a rarity and a great pleasure to do business with someone who is so thorough, accurate and prompt.

Clients Rod and Michelle F.

Thank you very much for all your help! You have provided a very valuable service to me and I highly appreciate it. I will recommend you to everybody should someone ask me for an recommendation for a real estate attorney.

Client Sanjay P.

Excellent book!

J. Thomas Black, Houston Attorney

I would never have expected David to reply to my email on a weekend but he did. He is a very diligent, dedicated, and knowledgeable attorney. The website is so informative - it offers easy-to-understand explanations to real estate and asset protection questions.

Client Chris V.

I've been so impressed with your website and your expertise. I would endorse you anytime.

Charlie Kim
Dallas Attorney

As I acquired more investment properties – I now own about 50 rental houses – I became more concerned with asset protection. David Willis was able to create a simple two-company structure that recently withstood a court challenge. Having my real estate assets securely protected certainly adds to my peace of mind.

Client Bryan P.

Working with LoneStarLandLaw online was fast and efficient. I received high-quality, sophisticated legal documents - along with the advice I needed - without having to spend hours in a lawyer’s office.

Client John T.

David J. Willis is a clever lawyer who came up with a great plan to protect my rental property from lawsuits. I feel much more secure now. He is available by email whenever I have questions.

Client Marion W.

As a corporate attorney who does real estate I can say with confidence that David Willis is the real estate law leader in Texas.

Kevin Vela
Dallas Attorney

I live in London but was buying a small apartment complex in Texas. Mr. Willis handled the whole transaction for me, as both my lawyer and real estate broker. It was a relief to put the transaction in the hands of someone who knows what he’s doing.

Client Phillip K.

My portfolio contains a mixture of rent houses and owner-financed properties. I rely on David Willis for evictions, foreclosures, deeds, leases, options, and the like. This is a guy who knows the system and gets the job done.

Client Darrell P.

As an attorney I am familiar with David Willis' expertise in real estate. I highly recommend his book. If David wrote it, you can depend on it!

Paul Spielvogel
Woodlands Attorney

Not long ago my LLC was sued over a contract - and I was sued along with it, personally. David Willis was eventually able to get my name removed from the suit. He also filed a counterclaim for a frivolous lawsuit. He is an aggressive lawyer to have on your side.

Client James S.

Copyright 2013. All rights reserved worldwide.

Texas Margin Tax

by David J. Willis
Attorney at Law

Texas does not have a state income tax for individuals, but it does tax the profits of business entities according to the "margin tax" which is found at Chapter 71 of the Texas Tax Code. The advent of the margin tax significantly complicates what used to be a relatively simple system of state taxation. This article summarizes some of the highlights of the margin tax. Beyond that, this office does not give tax advice. For a detailed analysis one should consult the Tax Code as well as a knowledgeable CPA.
Sec. 171.002(a) of the Code provides that the statutory maximum margin tax rate applicable to a taxable entity not engaged in retail or wholesale business is 1%. However, the maximum amount of gross revenues that is subject to the tax is 70%; therefore, in practical effect, this tax rate is 0.7%. Deductions may also apply to the extent that deductible compensation and other items comprise at least 30% of this "standard deduction." This standard deduction has not changed.

No tax is due if the total tax liability is less than $1,000 or if total revenue falls beneath the "small business exemption," which has been raised from $300,000 to $1,000,000 for the years 2010 and 2011. In 2012, the exemption will fall to $600,000.

Taxable entities include: a partnership, limited liability partnership, corporation, banking corporation, savings and loan association, limited liability company, business trust, professional association, business association, joint venture, joint stock company, and a holding company. Not included are sole proprietorships, general partnerships composed entirely of natural persons that do not have limited liability, a "passive entity," and certain other specified entities. "Passive entity" is defined as an entity that (i) is a general or limited partnership or a trust other than a business trust, which (ii) during the relevant taxable period derived at least 90% of its federal gross income from capital gains from the sale of real property (this excludes short-term gains and ordinary income attributable to depreciation recapture); and (iii) during the relevant taxable period did not receive more than 10% of its federal gross income from rent.

Note that limited liability partnerships are now specifically listed as taxable entities. The old incentive for using this vehicle for real estate investment purposes has disappeared, at least from the perspective of state taxation.

The revised law contains a provision for deduction of health care costs for small businesses.

The foregoing has been a quick informational review and is no substitute for consulting with a qualified CPA.


Information in this article is proved for general informational and educational purposes only and is not offered as legal advice upon which anyone may rely. Legal counsel relating to your individual needs and circumstances is advisable before taking any action that has legal consequences. Consult your tax advisor as well. This firm does not represent you unless and until it is expressly retained in writing to do so.


. Willis is board certified in both residential and commercial real estate law by the Texas Board of Legal Specialization. More information is available at his web site, http://www.LoneStarLandLaw.com.Copyright © 2013 by David J. Willis. All rights reserved