Royalty Income

Each royalty is modeled as its own entity, allowing you to review the tax impact of individual activities while also seeing the combined results on the Summary tab.

Holistiplan will calculate the net income of each royalty, oil & gas depletion (when applicable), and any Net Investment Income Tax (NIIT) implications.

Getting Started 

In Scenario Analysis, navigate to the Schedule E Income subsection within the Schedule 1 Income section and click the pencil icon in the Rentals and Royalties row.  

For convenience, scenarios generated by copying an uploaded return will automatically include the names of any royalties from that original return.

Alternatively, if you are working on a scenario with no previous royalty activity, click the + Add Entity button to get started:

On the following screen, enter the name of the royalty, indicate that this is Royalty Income in the Entity Type drop-down menu, and select the Royalty Type. You can also add new entities from this screen by clicking the + Add Entity button.

Net Income 

Enter gross royalties received and associated operating expenses to determine the net income/loss for the royalty.

For Oil & Gas royalties, complete the Depletion section. Holistiplan defaults to the Percentage method (which reduces gross royalty income by 15%) before netting operating expenses to arrive at net royalty income.

Alternatively, users can enter the cost depletion amount, and Holistiplan will apply the greater of the two methods to the gross royalty amount.

 Summary Tab 

The Summary tab combines every royalty (and rental income, if any) into one view to allow for a review of net income/loss across all entered entities.