Some area landowners may like receiving large payments for leasing property for oil and natural gas, but it also comes with tax issues.

According to our news partners at the Times Reporter, farmers continually deal with business issues, a one-time lease check or the potential for large royalty payments, which in turn pushes them in a new tax territory.

The Times Reporter talked with Robert Mapes, a certified public accountant who encourages all landowners to meet with a tax professional to weigh their options.

Advisers stress that lease payments are subject to ordinary tax income and not considered as capital gains for tax purposes because landowners are keeping their property with the potential for more income through royalty payments.

The paper reports that tax strategies are available depending on how much is at stake. For example, farmers with maybe 20 acres generating a $100,000 lease won’t have as many options as someone who is receiving a check for more than $1 million.

But experts say to keep in mind that all of the normal business deductions are available. Equipment purchased must be in service by Dec. 31 of this year to qualify for a deduction. Mapes told the Times Reporter that it could be worth pre-paying property taxes, and consider estate planning for tax-saving strategies.