Value of non-producing minerals at the time of inheritance
Can anyone explain how to determine the value of non producing minerals at the time of inheritance. I recently sold some mineral acres which are subject to 15% Capital Gains Tax. However, only the difference of what the minerals were worth , at the time of inheritance, and what the minerals were sold for is subject to the 15% tax. A "basis", of the minerals, must first be determined.
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Permalink Reply by Aubrey C. Sanders, Jr. on
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I had a friend in OK about 40 years ago whose wife inherited property with oil production and RESERVES with estimated value of $1,000,000 . The federal government expected them to pay taxes on this estimate. This friend was pretty well off, but not cash rich.
Unfortunately he died before matter was settled and I don't know how it turned out.
Petroleum reservoir engineers often evaluate reserves for estates. I had to hire one to evaluate property which my siblings and I inherited. This was 30 years ago. The price paid/offered for mineral sales is usually based upon estimated reserves by buyer, however torturously done.
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