Oil & Gas Royalties, Like-kind Property, and

The 1031 Exchange

Just like traditional real estate, oil and gas mineral and royalty interests are considered like-kind replacement property for the purposes of a 1031 exchange. This means that investors have the option of investing all or a portion of the proceeds from a commercial real estate transaction into oil and gas minerals all while deferring capital gains taxes.

IRC-1031 Exchange Tax Benefits: Investing in Oil and Gas Royalties

  • Capital gains tax deferral. A 1031 exchange allows investors to diversify their portfolios while deferring capital gains taxes
  • Maximum capital available to invest. A 1031 exchange maximizes the amount of capital you have available to invest, which helps not only maximize potential personal investment returns but also helps promote the overall economic health of the nation.
  • Exposure to non-market correlated cash flow potential. A 1031 exchange into minerals/royalties provides exposure to non-market correlated cash flow potential. Unlike commercial real estate that is driven by rents, royalty cash flow is generated from a well’s monthly production sales. Additional cash flow may be added as new wells are drilled on the acreage.
  • Asset appreciation potential. Mineral/royalty ownership in unconventional shale plays provides exposure to upside potential.  As continued development “proves up” additional reserves, the market value of royalty interests has the potential to increase, resulting in a better overall ROI.

A mineral lease and mineral royalties are considered real property for federal tax purposes and may be eligible for a 1031-exchange.

Educate yourself on royalty investing…

Download Our Free Investing Guide

Get our FREE E-Guide and discover seven things you may not know about Oil & Gas Royalty ownership, including how royalties can play an important part in a well diversified investment portfolio. Accredited Investors Only.

Are royalties a good fit for your portfolio?

Contact Us for a Complementary Consultation

Our experienced team will discuss your current portfolio and help you determine if investing in royalties makes sense for you.

Our Operator Partnerships Include:

Royal Mesa Oil and Gas Royalties with Texaco & Shell
Royal Mesa Oil Royalties with ExxonMobile & ConocoPhillips
Royal Mesa Oil Royalties with Devon & EOG Resources
Royal Mesa Oil Royalties with Anadarka & Penn Virginia
© Copyright - Royal Mesa Minerals

View Royal Mesa Mineral's Reg D filings with the U.S. Securities and Exchange Commission. There are significant risks associated with investing in oil and gas ventures. The information contain throughout this website is for general purposes only and is not a solicitation to buy or an offer to sell any securities. General information on this site is not intended to be used as individual investment or tax advice. Consult your personal tax advisor concerning the current tax laws and their applicability and effect on your personal tax situation.
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