I sold some of my mineral interest this year (2014) in Andrews County and was told that I would have to pay capital gains on the value from 1971. How do you determine the value? It was purchased in 1914 and I inherited it in 1971 so I will owe the difference in value from 1971 to 2014.
It should be the value that was put on the estate inventory or federal estate return, if there was one. You get a free stepup in basis on inherited properties, so you don’t have to use 1914 values.
How do you get an estate inventory from 1971? 1971 is when we inherited the mineral interest so that is the year I was told base the value. I am to subtract the 1971 value from 2014 sells to determine what capital gains I owe 20 per cent on.
Audrey, The inventory may be in the probate file. Also see if the attorney who handled the probate is still in business. Finally, check the papers of the person who acted as the executor.
Unfortunately, it was not probated . I have the affidavit of heirship for the estate. Any other options?
You are probably looking at hiring a mineral appraiser who has access to historical information.
You "tax basis" or value in the mineral rights you inherited in 1971 is the fair market value of those rights on the day of the decendent's death or the "alternate valuation date" which is 6 months hence from the day of death. I would contact the executor of the estate to see what value he used for his calcuations in order to complete probate.
There wasn’t any probate just an affidavit of heir ship I was advised to contact Andrews County to determine value of net mineral acre in 1971 or land tax value. What do you think?