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As far as state taxes, yes you will be subject to Colorado income tax since the income is sourced in Colorado. Since you are a resident of California, you are taxed on your income from all sources, but you will get a credit for taxes paid to other states. So you won't be taxed on the same income in 2 different states.
In answer to your other questions, there's not a lot you can do to minimize taxes. Gifting money to someone else doesn't help because gifts are not deductible to the giver nor are they taxable to the receiver. In addition, if your gift exceeds the annual exclusion amount (currently 13,000 per person per year) then you will be required to file a gift tax return.
In order to put money into a 401K or an IRA, you must have "earned income". Royalties are not considered earned income. You would need to have wages or be actively involved in a trade or business. If you do have employment in which you can participate in a retirement plan, by all means, max out the contributions to the plan and then use the royalties for living expenses.
You should consider paying estimated taxes. In fact you will be required eventually to send in estimates because the requirement is based on your previous year tax liability. So for example, if you started receiving the royalties in 2011 and it causes you to pay tax, you will be required to make estimated payments for 2012.
If you invest in a rental home, it may be beneficial from an income perspective, but it won't save any taxes. If you experience a loss from the rental activity, you generally can't use the loss to offset royalty income. There is an exception to that rule if your total adjusted gross income for the year is below $150,000.
I would not advise spending money just to save taxes. You are better off keeping your money, investing wisely, and taking every deduction available to you. By the way, with oil and gas royalties, the tax laws permit a 15% depletion deduction. You may need to see a professional tax preparer to make sure you get all the deductions you are entitled to.