A couple that files a joint Federal tax return is eligible in the KW system to share one Royalty Cap. The couple is not required to share a single royalty cap. This does not apply to any other situation other than a couple filing a joint Federal tax return.
For a couple to share a royalty cap, the royalty anniversary dates must be the same. In many cases the couple joined at different times and therefore have different anniversary dates and the couple has the choice to use either associate's anniversary date.
You should consult with your Agents to ensure they pick the date most beneficial to them. You must take into account royalties already paid in the current anniversary year. In the end, it is their decision to make, however you should look at closed production and inform them of what their royalties paid will look like once their anniversary year potentially starts at a different time.
Married couples sharing one cap must have the same anniversary date. You can sync the dates for married couples yourself using the following process.
NOTE: This is only displayed one time. Once you start the process, you will not be prompted again, so you must ensure you open the correct record first.
- Find out which anniversary date that the couple wishes to use.
- Then open the associate record for the associate whose date needs to be changed.
- Enter the spouse MORE ID in the record (Commissions Tab of the Associate Record).
- Click Save.
- WinMORE will display the spouse’s anniversary date and ask if the royalty date of the associate being edited is to be changed to that of the spouse.
- Answer Yes.
Note: Be careful to respond appropriately, once the royalty date alignment is accepted either way, it cannot be changed from either associate and the spouse field will be locked from further editing.
Cap Amounts and Processing Transaction Styles
There are three approved options for married couples sharing one cap. WinMORE has to be set up differently for couples depending on who closes what and when:
- If a couple splits all transactions fifty-fifty (the same set of DAs appear on both royalty anniversary lists), you can set up half caps. For example, this could be $25,000 Royalty Base in each associate’s record. You will also want to enter this amount in the CAP Default box so that the cap is not reset to the full amount on their next anniversary.
- If only one closes everything (one partner's royalty anniversary list has DAs, but the other's does not), Put the full cap amount ($50,000) in the Royalty Base of the person’s record who closed the transactions. The other Associates record will be set to $0.00 royalty base (this will result in a royalty exception, for which you will resolve by entering the following note in the commission section: married couple with production booked under first last MORE ID; this does not require a royalty adjustment request). You will also want to enter this amount in the CAP Default box so that the cap is not reset to the full amount on their next anniversary.
- If they close transactions randomly (each partner has a mostly different set of DAs on their two royalty anniversary lists), you will follow the same process for Tracking Caps Across Multiple Market Centers as you do for dual affiliated associates. You will have to watch their GCI and balance the amount of the cap between the two transactions until the full cap is met. Before posting this DA, go into their Associate record and adjust the royalty base cap so when you post the DA, it will calculate the Royalty correctly. Best practice is to set each cap to 1/2 the amount and then adjust as needed. You will also want to enter this amount in the CAP Default box so that the cap will be reset to the original amounts on their next anniversary.
- If the couple decides to change which partner closings are run under before their royalty anniversary resets, you will treat this just like an Associate Transfer Process to calculate the updated royalty base cap for the remaining royalty owed.
NOTE: At any given time the total of the Royalty Base Cap between the two partners should be equal to one full royalty base cap of $50,000.00. The full amount of royalty must be collected on each transaction until their total GCI has exceeded the total Royalty Base Cap. One Associate cannot be capped on Royalty without the other also being capped.
NOTE: Married couples are not required to have one cap.
NOTE: Company Dollar caps are a local Market Center decision. If you choose to allow them to share one cap, you will adjust the cap amount the same way the royalty caps are adjusted.