Immediate Cash Instead of waiting for a well to be drilled and royalties produced at some (possible) future date, selling your interest means cash today—at a guaranteed price!
Estate Settlement Dividing interests from an estate can be lengthy and confusing. Selling an estate interest and then dividing the proceeds is a far simpler process.
Accounting Nightmares When you own an interest in a producing well, large amounts of accounting are involved. Owning mineral rights can be time-consuming and difficult to manage.
Make Other Investments Over time, your royalties will decrease as wells become depleted. Many sellers choose to reinvest in other real estate assets with a 1031-LKE - and pay no income taxes! Other sellers desire to have cash in uncertain economic times.
Current Tax Advantages You pay a one time capital gains tax when selling, currently 15%. In the future, increases in tax rates are expected! And don't forget, royalties are subject to Federal, State, and Property taxes!
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