Do you own land or have an interest in mineral rights, such as oil, gas, or other minerals? Your land or mineral rights are valuable property rights that can be given to support our work and mission.
How Can a Gift of Land and Mineral Rights Benefit You?
When you make a gift of your interest in land with mineral rights, you may benefit in the following ways:
- Receive a tax-saving charitable deduction
- Avoid income taxes on royalty payments
- Receive lifetime payments by funding a charitable remainder unitrust with your land and mineral rights
- Support the charitable causes important to you
More on Gifts of Mineral Rights
- Other Minerals: Coal, iron ore, sulfur, and precious metal are considered minerals.
- State Law: The laws of your particular state will affect the ownership rights of minerals.
- Real Property: Minerals are considered part of the real estate until extracted.
- Strategies for Gifts of Mineral Interests
- One of the biggest challenges with owning land rich in oil, gas, or other minerals is the income taxes arising from production. There are four basic ways you can use your land while managing your income in a good way:
Gift of All or a Portion of Your Land
You can receive the most direct tax benefit by giving us all or a percentage of your ownership interest. You may be entitled to take an income tax deduction for the appraised value of the portion you give. This reduces your income and provides immediate tax savings while supporting our work.
Gift of Royalties
You can give a portion of your royalties to support our work today or several years. This strategy may allow you to achieve your charitable goals while lowering income and reducing your taxes.
Definitions
Mineral Rights: Referred to often as “mineral interests,” are the rights to mine (or extract) minerals, oil, and natural gas sitting below ground. These rights can be owned in conjunction with the “surface” rights or owned separately.
Mineral Lease: A legal arrangement where a third party enters into a contract with the owner of land or mineral rights to extract the minerals, oil, or natural gas.
Royalties: The payments are made under a mineral lease from the party extracting the minerals, oil, or natural gas to the owner of the mineral interests.
Charitable Remainder Unitrust
You receive income while fulfilling your charitable goals. By giving your land and royalty interest to a charitable remainder unitrust, you receive a charitable income tax deduction and payments based on a percentage of the trust’s value each year. After all, payments have been made; the remainder will go to help further impact our mission.
Charitable Life Estate
You can make a gift of your home, farm, or ranch to us while retaining a “life estate,” which is the right for you to continue to use the land for as long as you live. Even though the land will not pass to us right away, you receive an immediate income tax deduction for your gift.
Is a Gift of a Mineral Interest Right for You?
If you own land with minerals, would like to save income taxes, and desire to support our work, these gift strategies may be worth considering.
May We Be of Assistance?
If you have any questions about gifts from your mineral interests, please contact us.