A Royalty Trust is a type of limited partnership formed to gain tax advantages, usually invested in assets like crude oil, gas production, timber, iron ore, or real estate.
Royalty trusts are noted for their high yield as unit payments (they aren't dividends), which are partially protected from income taxes by depletion. The unit payments on US royalty trusts are not qualified dividends. The unit payments on Canadian royalty trusts are qualified (but their value changed sharply recently as Canada changed their tax requirements on these securities).
Related Fool Articles
Recent Mentions on Fool.com
- Energy Investing 101: A Roundup of Refining Stocks
- 2 High-Yielding Investments You Need to Avoid Like the Plague
- Why Crashing Oil Prices Mean Income Investors Should Avoid These 3 High-Yielding Investments at All
- How to Buy Great Healthcare Stocks
- 3 Value Stocks Near 52-Week Lows Worth Buying
- GlaxoSmithKline's Vaccine For Ebola Takes an Important First Step