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Royalty Trust

   Also found in: Wikipedia 0.01 sec.
Royalty Trust
A corporate structure for companies involved in oil, gas, mining, or similar industries. In a royalty trust, profits are not subject to corporate taxation, provided that at least 90% are distributed as dividends to shareholders. Royalty trusts prevent double taxation of dividends. Royalty trusts are generally publicly traded and their shares behave just like ordinary stocks. They exist in both Canada and the United States. T. Boone Pickens created the first royalty trust in 1979.

royalty trust
An ownership interest in certain assets, generally crude oil or gas production and real estate. Unlike the usual corporate organization, a trust arrangement permits income and tax benefits to flow through to the individual owners. Thus, some investors argue that a trust produces more value for the owners.


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Attributes A royalty trust is a legal entity established as income-producing vehicle to purchase royalty interests (profit interests) in mature, low-risk natural resource (e.
A royalty trust is a legal entity that purchases profit interests (interests that pass through profits, but not losses) in mature, low-risk, natural resource working properties (such as oil and gas).
Income trusts, royalty trusts and real estate investment trusts have become popular investment vehicles over the past few years.
 
 
 
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