Assessing Value of Royalties at Time of Inheritance

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.

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