(1) To the extent that a trustee accounts for receipts from an interest in minerals or other natural resources in accordance with this section, the trustee shall allocate them as follows: (a) If received as nominal delay rental or nominal annual rent on a lease, a receipt must be allocated to income. (b) If received from a production payment, a receipt must be allocated to income if and to the extent that the agreement creating the production payment provides a factor for interest or its equivalent. The balance must be allocated to principal. (c) If an amount received as a royalty, shut-in-well payment, take-or-pay payment, bonus, or delay rental is more than nominal, 90 percent must be allocated to principal and the balance to income. (d) If an amount is received from a working interest or any other interest not provided for in par. (a), (b), or (c), 90 percent of the net amount received must be allocated to principal and the balance to income. (2) An amount received on account of an interest in water that is renewable must be allocated to income. If the water is not renewable, 90 percent of the amount must be allocated to principal and the balance to income. (3) This section applies whether or not a decedent or donor was extracting minerals, water, or other natural resources before the interest became subject to the trust. (4) If a trust owns an interest in minerals, water, or other natural resources on May 17, 2005, the trustee may allocate receipts from the interest as provided in this section or in the manner used by the trustee before May 17, 2005. If the trust acquires an interest in minerals, water, or other natural resources after May 17, 2005, the trustee shall allocate receipts from the interest as provided in this section.
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