Is there a tax efficient single member patent holding company structure?

The single-member LLC structure you describe will likely result in the royalty income being taxed as self-employment income, subject to self-employment (SE) tax and ordinary income tax rates, regardless of whether it's a lump sum or ongoing payments. This is because the LLC is disregarded as a separate entity for tax purposes. To potentially reduce your tax burden on royalty income, consider forming a different entity, such as a regular corporation (C-corp) or an S-corp. A C-corp could potentially allow for lower tax rates on retained earnings, but this introduces corporate-level taxes. An S-corp might offer some tax advantages by allowing you to take distributions as salary (subject to employment taxes) and the remaining profits as non-taxed distributions. However, the optimal structure depends on many factors including the anticipated income level, other income sources, and long-term business plans. Consulting with a tax professional is crucial for determining the most tax-efficient structure for your specific situation. I am not providing tax advice.