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Adam Ferrari: The Pros and Cons of Selling Your Mineral Rights
If you own land in Colorado or any state where oil and gas is commercially developed, chemical engineer Adam Ferrari says you can sell your mineral rights to energy companies in order to accelerate your profits. Whether you decide to sell or not, oil and gas operating companies can legally access your subsurface to develop the mineral estate by either securing a paid-up oil and gas lease or via force pooling. Since the concept of force pooling varies by state and can be somewhat complex, we will dive into that in another blog. Some people will tell you that for the majority of mineral rights owners selling your mineral rights is the way to go but is that really the best advice. Here are the pros and cons of selling your mineral rights: Pros 1. Quick and tax efficient money. When you sell, the buyer gives you a lump sum payment for your mineral rights interest. This sale is treated as capital gains and affords a substantially lower tax rate than other forms of income. This makes t...
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