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February 12, 2022
Question

gas and oil royalties

  • February 12, 2022
  • 1 reply
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Why are my gas and oil royalties showing up as taxpayer owned, at risk, and non-passive? They should be passive income, and presumably not at risk. Also, I own the gas rights, but not the actual acreage. 

1 reply

February 12, 2022

do i have this correct? you sold the property to a developer and as part of the arrangement, you are getting royalties for the extraction.   anyway,  the Internal Revenue Service says “Net income from royalty and lease payments is not considered passive income

 

 

as to at-risk - probably not - unless you have to pay for losses, but if there net income at-risk is meaningless.