A royalty trust is a type of corporation, mostly in the United States or Canada, usually involved in oil and gas production or mining. However, unlike most corporations, its profits are not taxed at the corporate level provided a certain high percentage (e.g. 90%) of profits are distributed to shareholders as dividends. The dividends are then taxed as personal income. This system, similar to real estate investment trusts, effectively avoids the double taxation of corporate income.
Read more about Royalty Trust: Characteristics of Royalty Trusts, Canadian Versus U.S. Royalty Trusts, History of Royalty Trusts, Publicly-Traded Royalty Trusts, Private Energy Income Trusts
Famous quotes containing the words royalty and/or trust:
“Everyone likes flattery; and when you come to Royalty you should lay it on with a trowel.”
—Benjamin Disraeli (1804–1881)
“To place absolute trust on another human being is in itself a disaster, both ways, since each human being is a ship that must sail its own course, even if it go in company with another ship.”
—D.H. (David Herbert)