Level 2

oil and gas royalties and QBI

Forum|Forum|6 years ago
January 30, 2020
1 reply
9 views

trying to determine is oil and gas royalties (within a partnership entity) are eligible for the QBI?

This topic has been closed for replies.

itonewbie

Level 15

Royalties are inherently passive. Working interest is a different story.

---------------------------------------------------------------------------------Still an AllStar

2

2016yearAuthor

Level 2

That’s what I was thinking, but in doing some research, I found an article by KPMG that said they are not eligible, and then another article by Deloitte that said they were. IRS doesn’t seem to want to say, as I did further research, so I was thinking maybe there is some current rulings or cases that help one to further determine whether royalties are eligible for QBI

itonewbie

Level 15

@2016year wrote:

That’s what I was thinking, but in doing some research, I found an article by KPMG that said they are not eligible, and then another article by Deloitte that said they were. IRS doesn’t seem to want to say, as I did further research, so I was thinking maybe there is some current rulings or cases that help one to further determine whether royalties are eligible for QBI

That's why you need to distinguish royalties vs working interest. Those articles you cited go into great lengths to explain the technicalities. You may like to re-read them in details.

---------------------------------------------------------------------------------Still an AllStar

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