1031 Exchange and Mineral Rights

In Texas, most mineral interests, including working interests and royalty interests, are considered real property. That means they may qualify for exchange under Section 1031 of the Internal Revenue Code.

This allows investors to sell mineral interests and acquire other business or investment real property while deferring capital gains taxes. For example:

·      Sell working interests and acquire a retail shopping center

·      Sell working interests and acquire royalty interests

·      Exchange mineral interests for other qualifying investment real estate

A properly structured 1031 Exchange can provide flexibility while preserving capital for reinvestment.

If you would like to discuss how a 1031 Exchange may apply to your next mineral transaction, please contact Jeff Rattikin at rattikin@rattikinlaw.com.

For more information on our 1031 Exchange Services, click here.