Sell a portion of your interest…or all.
Why wait? Get paid for your mineral interest or royalties now
Reasons to consider selling
Mineral and royalty owners should consider selling all or a portion of their interests for a variety of reasons – from inflation to taxes, and even estate planning.
#1
Debt Repayment
Selling mineral rights allows owners the luxury of paying off debt, whether it be high interest credit card debt, mortgages, or loans.
#2
Avoid Risk
By taking a lump sum payment, mineral interest owners can guarantee themselves a sure thing rather than “roll-the-dice” in hopes that their properties are one day produced and that their royalty checks don’t fizzle out in a few years.
#3
Beat Inflation
Today’s dollar is worth much more than the dollar will be worth 10 or 20 years from now. By taking a lump sum payment for a mineral interest, owners can cash in now instead of receiving declining royalty payments in an increasingly devalued dollar.
#4
Control
As a mineral interest owner, you have no control over “if” or “when” your property will be developed. Many leases allow the operator up to 10 years to begin drilling for oil and gas. Many properties are never developed at all. By selling all or a portion of your mineral interest, you can guarantee yourself a payday, regardless of the plans of the operator.
#5
Tax Considerations
Lease bonuses are treated as regular income by the IRS and are taxed at tremendously high tax rates. A sale of mineral interests, however, may qualify for long-term capital gains tax rates, which are historically much lower. A 1031 Exchange is another excellent strategy to save on taxes when selling your mineral rights, potentially allowing you to defer taxes on the sale if you meet the eligibility requirements.
#6
Estate Planning
Often it is easier to liquidate mineral rights held by an individual while they are still alive, rather than waiting until after their death. If the individual owns mineral rights in more than one state their estate would need to be probated in each of them in order for title to pass to their heirs in most cases. This can result in a lot of expense for an estate, and thus the heirs. It is much easier to distribute cash assets to heirs than it is to divide up property after someone passes away. Many individuals decide to sell for this reason, especially those with smaller interests
Contact our team of experts
We will answer any questions you have and provide a no-obligation, custom quote for your consideration.