Reasons to sell your mineral or royalty interests now
Selling your mineral or royalty interests can be a nerve-racking decision. Here are reasons why it may be best to sell your mineral rights or royalty interests sooner rather than later.
Volatile Asset Prices
Selling mineral or royalty interests now eliminates all risk associated with volatile oil and gas prices, an uncertain political climate and a constantly depleting mineral asset. Oil and gas prices are in constant flux, and with every passing day fewer natural resources are present in the ground.
Estate and Trust Issues
You can liquidate and clean up the assets of an estate by selling mineral and/or royalty interests. In addition, selling mineral or royalty interests can help simplify tax issues by reducing expenses that are incurred when mineral or royalty interests are part of an estate or trust.
Oftentimes, mineral or royalty interests can make up a significant portion of an owner’s net worth. Selling down all or a portion of your mineral assets can diversify your investment portfolio and income stream.
By selling your mineral and/or royalty interests now, you can simplify your tax preparation. The cost and percentage depletion of an oil and/or gas well are a part of computing taxes, and it can be cumbersome to keep track of royalty interest income and the taxes associated with it. In addition, you will no longer be required to pay property taxes when the mineral rights and/or royalties are sold.
For the small mineral and royalty interest owner, the cost associated with transferring ownership can exceed the perpetual value of the mineral and/or royalty interest as it gets passed down and split up among heirs. Selling mineral and/or royalty interests can reduce the complexity that comes with increasingly fragmented mineral and/or royalty interests.