Prob. Code, § 16350

(a) To the extent a fiduciary does not account for a receipt from an interest in minerals, water, or other natural resources as a business under Section 16432, the fiduciary shall allocate the receipt in the following manner:

(1) To income, to the extent received:

(A) As delay rental or annual rent on a lease.

(B) As a factor for interest or the equivalent of interest under an agreement creating a production payment.

(C) On account of an interest in renewable water.

(2) To principal, if received from a production payment, to the extent subparagraph (B) of paragraph (1) does not apply.

(3) Between income and principal in a reasonable manner, to the extent received:

(A) On account of an interest in nonrenewable water.

(B) As a royalty, shut-in-well payment, take-or-pay payment, or bonus.

(C) From a working interest or any other interest not provided for in subparagraph (A) or (B), or paragraph (1) or (2).

(b) This section applies to an interest owned or held by a fiduciary whether or not a settlor was extracting minerals, water, or other natural resources before the fiduciary owned or held the interest.

(c) An allocation of a receipt under paragraph (3) of subdivision (a) is presumed to be reasonable if the amount allocated to principal is equal to the amount allowed by the Internal Revenue Code of 1986, as amended (Title 26 of the United States Code, as amended), as a deduction for depletion of the interest.

(d) If a fiduciary owns or holds an interest in minerals, water, or other natural resources before the effective date of this chapter, the fiduciary may allocate receipts from the interest as provided in this section or in the manner used by the fiduciary before the effective date of this chapter. If the fiduciary acquires an interest in minerals, water, or other natural resources on or after the effective date of this chapter, the fiduciary shall allocate receipts from the interest as provided in this section.