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trying to determine is oil and gas royalties (within a partnership entity) are eligible for the QBI?
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Royalties are inherently passive. Working interest is a different story.
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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
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Oh... and in my research, I found somewhere, I don’t remember where... maybe the IRS, that said passive enterprises can qualify for QBI
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@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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@2016year wrote:
Oh... and in my research, I found somewhere, I don’t remember where... maybe the IRS, that said passive enterprises can qualify for QBI
The safe harbor is only applicable to rental real estate enterprises. Sounds like you may be confused. Here're the documents you may like to reference.
Still an AllStar