I received a payment from BB Land for lease of oil and gas rights to land in West Va. I need to know whether this initial payment is taxable as royalties, miscellaneous , or something else. Also, weirdly, I cannot find their tax identification number. Or phone number. Any help much appreciated. Fred Reed jetpossum@gmail.com
If you are referring to a bonus payment for signing a lease, I think (not an accountant!) that it is considered rental payment. Not royalty. In the Olden Days, many leases would start with a period of rent, a certain amount per month or per quarter, until the term of the lease was up (maybe 3 years) or until a well was drilled and producing. Then the companies started paying the full amount up front, calling it a Paid Up Lease. That is my understanding. No help on BB information.