Company: GULTU
Filing Date: 2025-03-28
Form Type: 10-K
Source: 0001641172-25-001201
Chunk: 31

Company: Gulf Coast Ultra Deep Royalty Trust
Filing Date: 2025-03-28
Form: 10-K
Item: Item 8
Chunk 31
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 through Form 1099 to the investors and the IRS. Every trustee
or intermediary that is required to file a Form 1099 for a trust unitholder must furnish a written tax information statement that is
in support of the amounts as reported on the applicable Form 1099 to the trust unitholder. Any generic tax information provided by the
Trustee of the Royalty Trust is intended to be used only to assist Royalty Trust unitholders in the preparation of their U. S. federal
and state income tax returns.

  43  

Royalty
Trust unitholders should consult their own tax advisors regarding the treatment of the income, gain, loss or deduction derived by the
unitholder for the Royalty Trust.

5.
RELATED PARTY TRANSACTIONS

Royalties.

Commencing
with the distribution to Royalty Trust unitholders in the first quarter of 2022, the Royalty Trust withheld $8,750 from the funds otherwise
available for distribution each quarter through the first quarter of 2023, with the intent of gradually building a cash reserve of approximately
$350,000. As no proceeds have been available for distribution since the first quarter of 2023, the Royalty Trust has not withheld any
funds for the cash reserve with respect to those periods. Unless another well is drilled on the onshore Highlander subject interest and
produces hydrocarbons in commercial quantities as discussed in Note 3 above, the Royalty Trust does not intend to withhold funds for
the cash reserve as the Royalty Trust does not expect to have any cash available to distribute to Royalty Trust unitholders in future
periods. This cash is reserved for the payment of future known, anticipated or contingent expenses or liabilities of the Royalty Trust.
The Trustee may increase or decrease the targeted cash reserve amount at any time, and may increase or decrease the rate at which it
is withholding funds to build the cash reserve at any time, without advance notice to the Royalty Trust unitholders. Cash held in reserve
will be invested as required by the Royalty Trust Agreement. Any cash reserved in excess of the amount necessary to pay or provide for
the payment of future known, anticipated or contingent expenses or liabilities eventually will be distributed to Royalty Trust unitholders,
together with interest earned on the funds. For additional information regarding distributions to Royalty Trust unitholders, see Note
6.

Funding
of Administrative Expenses.

Pursuant
to the Roy