(1) To the extent that a fiduciary does not account for a receipt from an interest in minerals, water, or other natural resources as a business under s. 738.403, the fiduciary shall allocate the receipt: (a) To income, to the extent received: 1. As delay rental or annual rent on a lease; 2. As a factor for interest or the equivalent of interest under an agreement creating a production payment; or 3. On account of an interest in renewable water; (b) To principal, if received from a production payment, to the extent that subparagraph (a)2. does not apply; or (c) Between income and principal equitably, to the extent received: 1. On account of an interest in nonrenewable water; 2. As a royalty, shut-in-well payment, take-or-pay payment, or bonus; or 3. From a working interest or any other interest not provided for in paragraph (a) or paragraph (b) or subparagraph 1. or subparagraph 2. (2) This section applies to an interest owned or held by a fiduciary regardless of whether a settlor was extracting minerals, water, or other natural resources before the fiduciary owned or held the interest. (3) An allocation of a receipt under paragraph (1)(c) is presumed to be equitable if the amount allocated to principal is equal to the amount allowed by the Internal Revenue Code as a deduction for depletion of the interest. (4) If a fiduciary owns or holds an interest in minerals, water, or other natural resources before January 1, 2025, the fiduciary may allocate receipts from the interest as provided in this section or in the manner used by the fiduciary before January 1, 2025. If the fiduciary acquires an interest in minerals, water, or other natural resources on or after January 1, 2025, the fiduciary must allocate receipts from the interest as provided in this section.
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