IF a person sells minerals from the site where they lived in the home for 7 years and RESERVED minerals, are those minerals exempt from income tax??
No. The sale of mineral rights owned for 366 days qualifies for federal long term capital gains. The last I looked the minimum tax was 15% and the max 20%. Louisiana gets a varying amount up to 5% depending on the total dollar amount of the sale. How long you lived somewhere has no relevance. It's how long did you own the asset. And 366 days is all you need.
That is what I thought but was HOPING it might come under ownership of home. These are minerals we reserved when we sold home we lived in. It is Desoto and we are getting some really large offers on minerals. Those offers are starting to look mighty good but would have looked a lot better if without tax!!
The tax advantages are substantial so go ahead and sell.
We are going to sell some. Just waiting for the best offer.
All “offers” are not the same. Many royalty buyers use the bait and switch method to try to get potential sellers to engage and then begin to lower the “offer”. If you have a substantial amount to sell use an attorney who can solicit the sale as a sealed bid process to level the playing field. Some royalty buyers seem to be just above the level of used car salesmen. Some, not all. Just be careful in the minefield.
THANKS Jay. We have had lots of offers but one seems very legitimate. A friend of ours just got a huge amt. from them and the check cleared (that's important). I have seen some attorneys negotiate for clients and negotiate so much they have lost the deal. Some have had great luck with attorneys. Personally I trust myself more than an attorney but I would tell regular sellers to get legal advice.
I requested friendship. Was wondering what your top dollar offer per acre has been. I’ve been approached too and live in Desoto Parish. We have some goals this cash could help us achieve. Thanks
Although an mcf of processed gas is a fungible commodity, mineral tracts are not. Each case is a unique reserve estimate and has a varying degree of perceived development timing. Therefore mineral value is unique to each specific location. The offer that one mineral owner gets may or may not be the same or similar for others even in close proximity.
I messaged you. I really value your opinion
There is no tax break on regular income, state or federal. In LA the state has a severance tax exemption program for "Deep" and "Horizontal" well classes. No severance is paid on the first two years of production or until a well pays out. So neither the operator or the royalty recipient pay that tax during the incentive period. The only tax break on the sale of mineral rights is federal long term capital gains.