Bow & Arrow is committed to providing the necessary information each step of the way to make families comfortable with the purchase process. A well-structured purchase agreement can provide both short- and long-term benefits to property owners and their heirs.
Here are just a few advantages to consider.
- A purchase agreement can provide you and your family with a lump sum payment, rather than monthly, quarterly or annual checks.
- While current natural gas prices have impacted the number of active wells and the amount monies paid to leaseholders, you can still receive significant value by selling your oil and gas rights.
- Selling your oil and gas rights eliminates any financial concerns regarding the potential that drilling and production activity may never occur; therefore eliminating the potential for any royalty income.
- There is a potential tax savings when considering capital gains vs. ordinary income. Royalties from production will be classified as ordinary income, while income from selling the oil and gas rights are classified as capital gains, if you have owned the property for more than a year. The capital gains tax rate is 20% and could continue to escalate in subsequent years.
- Purchase agreements can clear up and simplify estate issues, while eliminating ongoing paperwork and accounting-related issues.
If you have ever considered selling your mineral rights and/or have any questions regarding the process, we can provide you with additional information that may be helpful in assessing your personal situation. Feel free to contact a representative from Bow & Arrow for a confidential discussion with absolutely no obligations. Click here or call 412-373-LAND (5263).