Garland Cross-Border Tax

Families With Ties Abroad

Garland is home to one of the largest Vietnamese communities in Texas, as well as many families from Mexico, Central America, South Asia and Africa. Its plants include subsidiaries of foreign groups. All of this creates cross-border questions, and BOMCAS answers them remotely.

The Texas cross-border tax page covers Canada–U.S. rules and treaties in general, and this page covers Garland's families and foreign-owned plants.

Vietnam and No Treaty

The United States and Vietnam signed an income tax treaty in 2015, but it has not entered into force. Without a treaty, there are no reduced rates or tie-breaker rules. A U.S. resident who earns rent from a house in Vietnam, or sells land there, reports it on the U.S. return and claims a foreign tax credit for Vietnamese tax paid, limited to the U.S. tax on that income. Exchange rates and documentation of the original purchase price matter when land is sold.

Mexico and Central America

Families with property or accounts in Mexico report income from them, and the U.S.–Mexico treaty can help with double tax. Money sent home to relatives is generally not taxable to the sender or deductible. Relatives without SSNs who must be on a return may need ITINs.

Accounts Abroad

U.S. citizens and residents with foreign accounts totalling more than $10,000 at any time in the year file an FBAR. Those with larger foreign assets may also file Form 8938. Joint accounts with parents abroad count, and so do accounts where you have signature authority.

Gifts and Inheritances From Abroad

Gifts or inheritances from foreign individuals are not taxable, but those over $100,000 in a year must be reported on Form 3520. The penalty for not filing can be up to 25 percent of the gift, so it is worth filing even late. Inherited property abroad takes a basis equal to its value at death.

Foreign-Owned Companies

Garland subsidiaries of foreign groups, such as Epiroc, which is Swedish, file U.S. returns with Form 5472 for transactions with related parties and must price them at arm's length. Smaller foreign-owned LLCs, including single-member LLCs, also file Form 5472. Missing it carries a $25,000 penalty.

Sending Money Home and Bringing It Back

Families often move money between the United States and Vietnam or Mexico, for support, to buy property or when property is sold. Transfers of your own funds are not income, but the income earned on the money abroad, such as interest or rent, is. Bringing home sale proceeds can trigger bank questions, so keeping the sale documents and translations is wise. Cash over $10,000 carried across the border must be declared to U.S. Customs.

Foreign Pensions and Social Security

Residents who worked abroad before moving to Garland may receive foreign pensions. Without a treaty with Vietnam, Vietnamese pensions are generally taxable in the United States. Mexican pensions are dealt with under the U.S.–Mexico income tax treaty. The two countries signed a social security agreement in 2004, but it has never taken effect, so it does not yet prevent double social security tax.

Canadian Residents and Owners

Canadians working in Garland on TN or L-1 status file U.S. returns as residents and may still have Canadian filings. Canadians with Texas businesses or rentals file U.S. returns and report the income in Canada.

Common Filings

Form 1040 with foreign income.
FBAR and Form 8938.
Form 3520 for foreign gifts.
Form 1116 foreign tax credit.
Form 5472 for foreign-owned companies.
ITIN applications.