Mineral, oil & gas rights and royalties

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Owners of mineral rights - generally oil and gas interests - have an opportunity to make important gifts to The First Church of Christ, Scientist that may yield charitable deductions and avoid capital gains taxes. These gifts require careful planning, however, and tax benefits will vary depending on the type of interest owned and whether the donor is an investor or a business operator.

Oil and gas interests - leases, royalties, working interests, etc. - may be owned by individuals or through partnerships. The form of ownership may have an effect on the gift's tax results. Gas and oil rights are commonly owned separately from the land itself and may be bought, sold, traded or given away to family members or others during life or at death. Charitable deductions for gifts of this kind of property require that donors give away either their entire interest or an undivided fraction in their entire interest, for example - 20% of an overriding royalty interest. Qualified appraisals are needed to substantiate donors' deductions.

Note: It may also be possible to transfer mineral rights to a type of charitable trust that pays income to the Church for several years then returns the assets to you or your family. The type of charitable trust that may meet this need is called a charitable remainder trust. It also may be possible to fund a charitable remainder trust with oil and gas interests, but again, careful planning will be needed.

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Planning considerations

Here is a simplified look at the kinds of mineral rights people typically own and the charitable gift opportunities available:

How to proceed

If you are interested in making a gift of mineral rights, such as oil and gas interests, to the Church, please e-mail, call or write our office.