Royalties are payments based upon units produced by a well. Royalties can be paid on a monthly, quarterly, or semi-annual basis. These are generally taxable in the United States on a federal and state income tax basis.
Just like other royalties, family members inherit whatever business, money, and titles belonged to those before them. The business of running a gas well is taught and passed on.
What you need to know about gas royalties will be contained in the contracts the current owner has with the gas companies. Details of these agreements vary.
Gas well royalties go to the person who owns the land or who owns the mineral rights to the property from which the oil is being pumped. Gas well royalties are taxable income.
You will get a percentage of income based on the sale of gas from the well. The amount will vary month to month based on production and the gas price. This is taxable income that you will have to report on your tax return.
