Solved: Oil royalties are considered "portfolio" or "inves...
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s_baskett
New Member

I get oil revenues. I am being asked if this is a qualified business on schedule e. What is considered a qualified business? There is no guidance.

 
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KittyM
Level 2

I get oil revenues. I am being asked if this is a qualified business on schedule e. What is considered a qualified business? There is no guidance.

Oil royalties are considered "portfolio" or "investment income".  Investment income includes gross income from interest, dividends, annuities, or royalties not derived in the ordinary course of a trade or business

So, unless you have a "working interest" in the oil well or wells (which would be reported on Schedule C), your oil rents or royalties would not be considered Qualified Business Income.

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KittyM
Level 2

I get oil revenues. I am being asked if this is a qualified business on schedule e. What is considered a qualified business? There is no guidance.

Oil royalties are considered "portfolio" or "investment income".  Investment income includes gross income from interest, dividends, annuities, or royalties not derived in the ordinary course of a trade or business

So, unless you have a "working interest" in the oil well or wells (which would be reported on Schedule C), your oil rents or royalties would not be considered Qualified Business Income.

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