The Severance issue is the big issue facing us this year. We hope to form alliances against the measure as it stands.
Royalty owners are unwitting partners with the gas companies in that we already see most mineral owners paying post-production expenses up to 30% of their check.
But we also pay the severance tax
we pay ad valorem taxes
We pay income taxes and the current administration even wants to take away the depletion allowance which is the only deduction we get.
Further, if capital gains are doubled (it is supposedly only against "the rich"....but every farmer that has sold their farm has likely paid "capital gains" for selling any legacy land) then many people may be in the position of selling their property for less than the tax liability and loans against it. That would include land, buildings, and minerals.
I have seen a number of poultry farms that were sold with the sellers thinking selling out would free them of debt only to have their CPA tell them that they owe capital gains on the depreciation of their poultry barns. I saw one bill and it was $48,000 due the IRS. My uncle paid over $30,000 when he sold his small farm . 77 acres in the country literally was traded for a smaller house in town.
