I think the reference is to lease hounds who have succeeded in signing a lease for, say, a $1,000 bonus and 20% royalty, and then flipping to an E&P for, say, a $2,000 bonus and 25% royalty. The lease hound keeps the $1,000 excess bonus and the 5% overriding royalty. I'm sure many of these lease hounds have represented themselves and landmen.
A spreadsheet for each parish would be nice...you could include your section, acreage, offer amount, date of offer or signed contract, company or landman name/number....I wonder if that would be a possibility. It could all be organized in one place with a link from the first page. Just an idea...
This info we provided on joining, who,where and how much offered, is the valuable bargaining chip we all are really here for-I sent a message to Haynesville about releasing his data. Cross your fingers all.
I'm been in touch with a landman from JW Porter in Shreveport claiming to represent Chesapeake. I'm not sure what to do since this is the only person dangling a carrot in front of my face. Sabine Parish near Belmont. The only other person in contact was a private person offering me a small amount cash money tax free. It was tempting.
Payments, unfortunately, are NOT capital gains, but considered regular income and are taxed at your normal rate not the lower capital gains rates. I think the income should be treated as capital gains, but, it's one of those CTGSS (Cause The Government Says So) things.
There is no free ride with this thing, it's all taxable. No matter how you get it. But in this case I agree with KB, patience is a virtue.
It's not unlike most other types of assets. You don't get capital gain treatment unless you are selling an asset. When you're leasing your minerals or receiving royalties, you continue to own the underlying assets.
I acknowledge the same argument can be made in the case of timber -- the owner continues to own the land. However, for some reason, the trees themselves are treated as assets being sold.
From my understanding, the lower capital gains tax rate is based upon a SALE of real estate and our mineral leases are not a sale of real estate, and therefore for tax purposes, the lease money is considered RENTAL income.
As exciting as this is, we know that we have a responsibility to do this thing correctly. After all, we want the farm to remain a place where the family can gather for another 80 years and beyond. This site was born out of these desires. Before we started this site, googling "shale' brought up little information. Certainly nothing that was useful as we negotiated a lease. Read More