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Permalink Reply by Patricia An Herren on July 28, 2010 at 5:47

Thanks ...this was my thinking as well. They royalties might not be much but then again they could. Thanks again.

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Permalink Reply by Patricia An Herren on July 28, 2010 at 5:48

Thanks. I will.

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Permalink Reply by Geoman on July 28, 2010 at 10:48

My mother recently incorporated her assets (monetary, royalty interest and property) into an LLC with the three of us. There are advantages from the both the tax and asset protection perspective. She holds the controlling interest at 70% and we each have a 10% stake. We worked with our attorney and CPA to get it setup. I think it's a great thing.

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Permalink Reply by Skip Peel - Mineral Consultant on July 28, 2010 at 10:57

http://www.gohaynesvilleshale.com/group/deathandtaxes

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Permalink Reply by Mac Davis on July 28, 2010 at 11:04

Be very careful about incorporating. I believe that you can end up paying taxes twice. Once when the corporation gets the money, then again when you get the money as an individual. There may be ways to get around this.

Remember that the CPA and other advisers have a vested interest in setting up things like this because it generates fees for them. That doesn't mean they give you wrong advice, but you should have a degree of skepticism. Take the effort to get at least a rudimentary understanding of the way the taxes work so you don't get an Enron like "tax benefit" that actually evaporates when you do the final accounting years later.

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Permalink Reply by Kat Bloomfield on July 28, 2010 at 11:51

no correction necessary. I prefer Sub S; but that's my personal choice

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Permalink Reply by Mac Davis on July 29, 2010 at 1:31

Hardage, you may well be right. I'm just pointing out that you have to do incorporation right or you can make things worse.

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