Company: GULTU
Filing Date: 2025-03-28
Form Type: 10-K
Source: 0001641172-25-001201
Chunk: 18

Company: Gulf Coast Ultra Deep Royalty Trust
Filing Date: 2025-03-28
Form: 10-K
Item: Item 1A
Chunk 18
---
 by each Royalty Trust unitholder
and not by the Royalty Trust for each natural gas property. As a result, the availability or extent of percentage depletion deductions
to the Royalty Trust unitholders for any taxable year is uncertain.

The
Royalty Trust encourages Royalty Trust unitholders to consult their own tax advisors to determine whether and to what extent percentage
depletion would be available to them for both U. S. federal income tax and state income tax purposes.

Royalty
Trust unitholders will be required to pay taxes on their pro-rata share of the taxable income attributable to the assets of the Royalty
Trust even if they do not receive any cash distributions from the Royalty Trust.

Because
the holders of Royalty Trust units will be taxed directly on their pro-rata share of the taxable income attributable to the assets of
the Royalty Trust and such taxable income could be different in amount than the cash the Royalty Trust distributes, Royalty Trust unitholders
will be required to pay any U. S. federal income taxes and, in some cases, state and local income taxes on such taxable income even if
they receive no cash distributions from the Royalty Trust. Royalty Trust unitholders may not receive cash distributions from the Royalty
Trust equal to their pro-rata share of the taxable income attributable to the assets of the Royalty Trust or even equal to the actual
tax liability that results from that income.

As
a consequence of special reporting rules, Royalty Trust unitholders may not be able to recognize income/claim losses realized by the
Royalty Trust until the unitholders dispose of Royalty Trust units.

If
the Royalty Trust satisfies the general de minimis de minimis de minimis de minimis de minimis

  28  

Item
1B. Unresolved Staff Comments