Tex. Property Code § 116.205
This is the official text of Tex. Property Code § 116.205, part of Texas’s Property Code — governs real property, landlord-tenant law, and property transactions.
Not legal advice. This page reproduces the official text of a government statute for reference only. Laws change, and how a statute applies depends on your specific facts. For advice about your situation, consult a licensed attorney in your state.
§ 116.205. INCOME TAXES.
Official statutory text
(a) A tax required to be paid by a trustee based on receipts allocated to income must be paid from income.
(b) A tax required to be paid by a trustee based on receipts allocated to principal must be paid from principal, even if the tax is called an income tax by the taxing authority.
(c) A tax required to be paid by a trustee on the trust's share of an entity's taxable income must be paid:
(1) from income to the extent that receipts from the entity are allocated only to income;
(2) from principal to the extent that receipts from the entity are allocated only to principal;
(3) proportionately from principal and income to the extent that receipts from the entity are allocated to both principal and income; and
(4) from principal to the extent that the tax exceeds the total receipts from the entity.
(d) After applying the other provisions of this section, the trustee shall adjust income or principal receipts to the extent that the trust's taxes are reduced because the trust receives a deduction for payments made to a beneficiary.
(b) A tax required to be paid by a trustee based on receipts allocated to principal must be paid from principal, even if the tax is called an income tax by the taxing authority.
(c) A tax required to be paid by a trustee on the trust's share of an entity's taxable income must be paid:
(1) from income to the extent that receipts from the entity are allocated only to income;
(2) from principal to the extent that receipts from the entity are allocated only to principal;
(3) proportionately from principal and income to the extent that receipts from the entity are allocated to both principal and income; and
(4) from principal to the extent that the tax exceeds the total receipts from the entity.
(d) After applying the other provisions of this section, the trustee shall adjust income or principal receipts to the extent that the trust's taxes are reduced because the trust receives a deduction for payments made to a beneficiary.
Status: in_force · Read it on the official government site
Dealing with a real estate matter in Texas?
See all Texas Real Estate lawyers
About this page: Statute text is reproduced from official government publishers via the
Open US Law dataset
(Vaquill AI, snapshot v2026.08, CC BY 4.0). Primary legislative text like this is public domain under the government-edicts doctrine
(Georgia v. Public.Resource.Org, 2020). We link every section back to its official source so you can verify it independently.