I'm seeing deductions from oil and gas royalty payments totaling approx 33% - 50% or more of the gross check amount on mineral rights in CO. On several lines of a monthly statement the processing cost was higher than the value resulting in a loss on those lines. Some are listed such as Ad Valorem tax, Severance tax and state withholding. The largest deductions are listed as "Processing" and "Other Deducts". Where does this money go and how do I know if the deductions are appropriate?
Are these deductions the reason my W-2 lists my gross as much higher that the amounts I received as payments.