My sister and I just sold our Inherited Oil Royalties in Borden Co., Texas. I am seeking advice on determining the Fair Market Value at time of our inheritance. I have all the old records from my parents, the payments, the income tax returns, the tax assessments from Borden county for at least my father’s portion. I do not want to make a mistake on my taxes when it comes to dealing with capital gains. One issue is that we inherited 1/4 of the royalties after my mother’s death and the other 1/4 3 years later after the death of my father. I would like recommendations for someone that can look at the documents and give me an appraisal on their values. (At the time, oil was very high and our checks were substantial) I do my taxes myself and just need the assessment. Any info or advice is welcomed!
Did the executor file an estate tax return at the time of inheritance? That would have set the starting basis value based on an appraisal. The basis will have diminished over the years as annual depletion is deducted from the basis, down to the point where the basis is zero. The basis cannot go below zero. If you have held producing minerals for many years, it is quite possible that your basis is at or close to zero.