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Houston Tax Planning Attorneys

You may have found us by searching for “tax attorney near me,” “tax planning lawyer,” or “Houston tax advice.” You are in the right place. Mitchell Tax Law is a Houston tax law firm that focuses on tax planning — the work of structuring transactions, entities, investments, and benefits in advance so that our clients pay the lowest legal amount of tax. We help individuals, families, business owners, and closely held companies make tax-smart decisions before they sign, close, or file.

Good tax planning is rarely about a single deduction or a single form. It is about how the pieces fit together: what entity you use, when you recognize income, what kind of income or loss you have, how you document the deal, and how the position will hold up if it is ever examined. Our attorneys handle that planning work day in and day out, and reduce the answers to writing in the form of tax opinion letters, transaction memoranda, and private letter ruling requests when clients need a higher level of certainty.

How Houston tax planning attorneys add value

Most clients call us before a one-time, high-stakes event: the sale of a business, a real estate transaction, a major capital investment, the receipt of significant employee compensation or equity, an inheritance or trust distribution, or a transaction that does not fit neatly within the tax rules. The dollars at stake in these transactions are usually large, and the tax answer is rarely obvious. A small structural change — the order of two steps, the choice of one entity over another, the addition of a written election, or the timing of a payment by a few weeks — can change the tax result by a meaningful percentage of the deal.

We approach every planning engagement through the same set of technical lenses: income and exclusion rules, deductions and credits, the timing of income and expense, the character of gain or loss as capital or ordinary, and the applicable rate of tax. Each lens has its own body of authority — statutes, regulations, rulings, and case law — and we use the research tools and methods tax attorneys rely on to confirm that our advice is grounded in the law, not in conventional wisdom. For background on how this body of law is built, see our overview of the sources of tax law.

Choice of entity and business formation

Many tax outcomes are decided the moment a business is formed. The choice of entity — sole proprietorship, partnership, LLC, S corporation, or C corporation — sets the framework for how income is taxed, how losses pass through (or do not), how owners are compensated, and how the business is eventually sold or wound down. Choosing the wrong entity is not always fatal, but unwinding it later usually costs more than getting it right in the first place. In the right circumstances, owners can also change entity classification earlier than the standard five-year rule would suggest.

For partnerships and LLCs taxed as partnerships, we advise on partner-level economics, special allocations, and the partnership tax rules that govern who reports what. Active partners frequently ask whether they can avoid self-employment tax by holding limited partner interests, and the answer turns on rules that have shifted in recent years — including the IRS’s position that limited partners may be subject to self-employment tax when they materially participate. For S corporation owners, we plan around basis, reasonable compensation, and structural questions such as disproportionate distributions and a strategic S corp conversion to avoid tax basis limitations.

Related reading: Section 1244 stock losses · Choice of entity for pharmacies · S corporation distribution of appreciated assets · Disguised partnership sales · Zero-basis rule for contributed notes

Buying, selling, and restructuring a business

A business sale or acquisition is usually the largest tax event of the owner’s life. We help structure asset versus stock deals, allocate purchase price across asset classes, plan around installment sale treatment, and identify when a monetized installment sale or similar deferral structure makes sense — and when it does not. Buyers and sellers often have opposing tax interests, and the contract language that resolves those interests is where good planning earns its keep.

Deal mechanics matter too. Transactions sometimes need to be unwound or re-papered before year end; the rescission doctrine may allow that, but only in narrow circumstances. The IRS will also test the substance of a deal under the economic substance doctrine and related judicial doctrines, including a sometimes-creative government step transaction doctrine. We design transactions so they tell a consistent business story from start to finish.

Related reading: Settling debts in an asset purchase · Timing traps in failed installment sales · Failed ESOPs and installment sale rules · Non-facilitating costs in M&A and real estate · Triggering losses on a business sale

Real estate tax planning

Real estate generates some of the most rewarding and most punishing tax outcomes in the Code. Our real estate income tax planning practice covers acquisition structuring, depreciation strategies, immediate expensing for real estate costs, and the rules for short-term rentals. Investors who use rental real estate to generate paper losses are frequently caught by the passive activity loss rules, and we plan around them through documented real estate professional status, activity grouping, and the short-term rental exception.

When property is sold, the planning shifts to character, timing, and allocation. We address questions such as how to allocate sale price between real and personal property, income shifting on real estate sales, and conversions of a personal residence to rental use. For losses, we look at casualty rules — sometimes including losses on property the taxpayer does not technically own — and abandonment positions when a project goes sideways.

Related reading: Section 179D deduction in the final year · Construction delays that kill deductions · Short-term vacation rentals and material participation · Restructured businesses and passive losses · Tax losses from short-term rentals

Credits, incentives, and specialty deductions

Tax credits are dollar-for-dollar reductions in tax, and they reward taxpayers who plan ahead and document their work. We help clients claim and defend the research and development tax credit, including the qualification rules under Section 41, recordkeeping standards, and the unusual reality that research credit records must be kept for 40 or more years. We also advise on the solar tax credit and energy incentives, the employee retention credit, and other targeted credits that show up in business and individual returns.

On the deductions side, planning often turns on the charitable contribution rules, including the substantiation and appraisal requirements that swallow otherwise valid deductions when they are not followed precisely. Conservation easements remain a heavily contested area; structuring them correctly requires care around retained rights, appraisal independence, and the qualifying use of the property. We also handle planning around charitable remainder trusts, bargain sales, and inventory contributions.

Related reading: Missing statements in donation letters · Conservation easement denied for private golf course · Website development deductions and start-up rules · R&D credit made permanent · Charitable bargain sales

Compensation, retirement, and employee benefits

Compensation and benefits decisions create some of the most durable tax results because they recur every year. We advise on employee benefits design, equity grants, deferred compensation, and the tax treatment of items employers often overlook — for example, stock an employer mistakenly issued, in-kind fringe benefits, and severance or settlement payments structured as gifts.

Retirement and IRA planning is a separate discipline. We work with closely held business owners on self-directed IRAs and the prohibited transaction rules that limit them, on IRA distributions and rollovers, and on the use of split-dollar life insurance in compensation plans. For owners with both qualified plans and a possible business exit, we coordinate timing to avoid stacking ordinary income into a single year.

Related reading: Distributions from a forfeited IRA · Probate estate as conduit for retirement assets · Gifts to former employees · Military pension taxability

Tax basis, depreciation, and accounting methods

Two taxpayers can take the same deduction in the same year and reach different tax results because of accounting method differences. We plan around method elections, changes (Form 3115), and the timing rules that decide when a deduction is allowed. For depreciable property, we coordinate depreciation methods with cost-segregation studies, bonus depreciation phase-downs, and Section 179 limits. The goal is not just to take a deduction this year, but to make sure basis, recapture, and future deductions all line up correctly.

The character of income and the timing of deductions are recurring battlegrounds. We advise on capital versus ordinary characterization, interest deduction planning under sections 163(j) and related rules, cancellation of debt income exceptions and exclusions, and involuntary conversions that allow deferral when property is taken, destroyed, or condemned. For taxpayers with operating losses, we work the tax loss rules to preserve and use them.

Related reading: Section 754 election when a partner dies · Accounting for interest deductions · When you can’t deduct annual business expenses · Forgiving debt to your own entities · Avoiding tax on mortgage discharge

Estates, trusts, and family wealth transfers

Tax planning for families and family businesses spans the income tax, the estate and gift tax, and the generation-skipping transfer tax. We advise on lifetime gifts, valuation discounts, buy-sell agreement structuring for closely held business interests, and trust taxation for grantor and non-grantor structures alike. When timing matters, we help clients secure late GST tax elections and other relief that protects exemptions.

Family transactions sit at the intersection of income and transfer tax: a trust termination after death can trigger gift tax in unexpected ways; a buy-sell among related parties can produce both ordinary and capital characterization issues. Charitable strategies, including charitable remainder trusts, can supplement family planning where philanthropic goals align.

International, state, and specialty planning

Cross-border planning brings its own framework. We work on international tax issues for inbound and outbound investment, foreign information return obligations, and the foreign earned income, treaty, and credit rules that drive individual results. For state matters, our state and local tax planning covers Texas franchise and sales tax, nexus questions, and multistate apportionment for businesses operating across state lines.

We also handle specialty topics that do not fit any one bucket: virtual currency and crypto reporting and planning, captive insurance structures and their tax risks, lawsuit awards and settlements, the net investment income tax, and the centralized partnership audit regime for partnerships subject to BBA.

Related reading: Non-taxable return of capital · Structuring attorneys’ fees · Crypto received for microtasks · Tax on old loans

Written tax opinions and private letter rulings

When a position carries real dollars or real exposure, we reduce our advice to writing. A written tax opinion lays out the facts, walks through the controlling authorities, and explains how the law applies to the specific transaction. Written advice serves three purposes: it confirms that the right facts have been matched to the right law, it gives third parties (lenders, buyers, boards, courts) something to rely on, and in many cases it qualifies for penalty protection if the position is ever challenged. The rules for that penalty protection are detailed, but the savings can be substantial when they apply.

For the highest level of certainty, taxpayers can ask the IRS itself for an answer through a private letter ruling request. PLRs are not cheap and they are not fast, but for unusual transactions — reorganizations, novel structures, transactions affected by a recent change in law — they can be the difference between a closing and a stalled deal. We help clients evaluate whether a PLR is the right tool, prepare the submission, and shepherd it through the IRS.

How we work with Houston tax planning clients

Our planning engagements typically start with a focused conversation about what you are trying to accomplish, what the deal or position looks like, and what the timing pressures are. From there, we scope the work — sometimes a short memo is enough, sometimes a formal opinion is the right product, and sometimes the answer is to restructure the transaction before it closes. We work with your CPA, your business attorney, your financial advisor, and your other professionals so the tax answer fits the broader plan rather than competing with it.

Our firm frequently provides tax advice and written tax opinions for clients on significant and complex federal and state tax matters.

Please call us at (713) 909-4906 or schedule an appointment to talk to get tax advice from our tax attorneys.