Indiana § 30-2-14-33 Receipts from an interest in minerals or other natural resources

Indiana Statutes

§ 30-2-14-33 — Receipts from an interest in minerals or other natural resources

Indiana·Art. 2 GENERAL PROVISIONS·Ch. 14 Uniform Principal and Income Act

(a)To the extent that a trustee accounts for receipts from an interest in minerals or other natural resources under this section, the trustee shall allocate them as follows:

(1)If received as nominal delay rental or nominal annual rent on a lease, a receipt must be allocated to income.

(2)If received from a production payment, a receipt must be allocated to income if and to the extent that the agreement creating the production payment provides a factor for interest or its equivalent. The balance must be allocated to principal.

(3)If an amount received as a royalty, shut-in-well payment, take-or-pay payment, bonus, or delay rental is more than nominal, ninety percent (90%) must be allocated to principal and the balance to income.

(4)If an amount is received from a working interest or a

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(a) To the extent that a trustee accounts for
receipts from an interest in minerals or other natural resources under
this section, the trustee shall allocate them as follows:
(1) If received as nominal delay rental or nominal annual rent on
a lease, a receipt must be allocated to income.
(2) If received from a production payment, a receipt must be
allocated to income if and to the extent that the agreement
creating the production payment provides a factor for interest or
its equivalent. The balance must be allocated to principal.
(3) If an amount received as a royalty, shut-in-well payment,
take-or-pay payment, bonus, or delay rental is more than nominal,
ninety percent (90%) must be allocated to principal and the
balance to income.
(4) If an amount is received from a working interest or any other
interest not provided for in subdivision (1), (2), or (3), ninety
percent (90%) of the net amount received must be allocated to
principal and the balance to income.
(b) An amount received on account of an interest in water that is
renewable must be allocated to income. If the water is not renewable,
ninety percent (90%) of the amount must be allocated to principal and
the balance to income.
(c) This chapter applies whether or not a decedent or donor was
extracting minerals, water, or other natural resources before the interest
became subject to the trust.
(d) If a trust owns an interest in minerals, water, or other natural
resources on January 1, 2003, the trustee may allocate receipts from the
interest as provided in this chapter or in the manner used by the trustee
before January 1, 2003. If the trust acquires an interest in minerals,
water, or other natural resources after December 31, 2002, the trustee
shall allocate receipts from the interest as provided in this chapter.

Indiana § 30-2-14-33 (Receipts from an interest in minerals or other natural resources) — published by Counsel Stack Legal Research, free access to 12M+ legal documents.