Entity Setup
Planning Your Entity After OBBBA: FATCA, Foreign Income & Trump-Accounts
The One, Big, Beautiful Bill Act reshapes foreign income deductions, imposes new reporting requirements—especially around Trump Accounts and foreign-derived income caps.
By NomadicTax Research Team • 5-8 min read • July 6, 2026
## Key entity-level changes under OBBBA for 2025-2026
### Trump Accounts & Section 530A
Law firms, advocacy groups, and other entities may handle **“Trump accounts”**—financial accounts tied to entities controlled or influenced by certain individuals under Section 70204 of OBBBA. Entities must follow regulations governing accounts subject to certain thresholds based on affiliation and control. OBBBA instructs Treasury and IRS to issue proposed regulations on Section 530A for taxable years after December 31, 2025.([irs.gov](https://www.irs.gov/irb/2025-45_IRB?utm_source=openai))
### Foreign-Derived Deduction Eligible Income (FDDEI)
Under Section 250(b)(3)(A)(i)(VII) amended by OBBBA, certain property sales/dispositions that generate foreign-derived income may be excluded from FDDEI. Entities with cross-border transactions should assess structuring to avoid income falling outside deduction eligibility.([irs.gov](https://www.irs.gov/irb/2025-45_IRB?utm_source=openai))
## Reporting thresholds and penalties
- Section 6041/6041A payments over **$2,000** (as amended) require reporting by entities, effective after December 31, 2025. Entities must ensure their vendors and independent workers receive proper 1099s when payments exceed this threshold.([irs.gov](https://www.irs.gov/irb/2025-45_IRB?utm_source=openai))
- Penalties for failure to file under Section 6039K for **Qualified Opportunity Funds** (and similar funds) increased significantly. For example, a qualified rural opportunity fund failing to file may incur **$500/day**, max $10,000 per return—or up to $50,000 if the fund has assets above $10 million.([irs.gov](https://www.irs.gov/irb/2025-45_IRB?utm_source=openai))
## Practical structuring examples
### Example 1: Foreign sales business
ACME Imports LLC sells product to EU clients. Under previous law, certain dispositions were included in FDDEI. Since OBBBA expanded exclusions for some dispositions (e.g. licenses, leases), ACME should review whether current contracts include such dispositions, and if so, how they impact FDDEI eligibility. Proper classification may save tens or hundreds of thousands in taxable income.
### Example 2: Qualified Opportunity Fund manager
Juan runs an opportunity zone fund with $12 million in assets. He missed filing the return under Section 6039K. That’s a potential penalty of up to **$50,000** a day if intentional disregard, far more than small-fund managers might expect. Better to file timely or show reasonable cause.
## Recommended strategies for entities
- **Update internal vendor/vendor-service agreements** with clauses ensuring compliance with 6041/6041A thresholds and accurate information reporting.
- **Maintain detailed contract types** to ensure “licenses, sales, dispositions” are properly treated in FDDEI calculations.
- **Review whether your accounting software** captures all required fields to segregate income subject to new foreign-related definitions.
- **Consult tax counsel** before structuring entities or making mergers/acquisitions, especially where ownership or control triggers “Trump account” rules.
Effectively, OBBBA forces many entities to re-evaluate their foreign income exposure, reporting obligations, and global compliance frameworks to avoid costly mistakes.