# Cost basis estimate for inherited mineral rights in Eddy Co, NM
**URL:** https://www.mineralrightsforum.com/t/cost-basis-estimate-for-inherited-mineral-rights-in-eddy-co-nm/43490
**Category:** Accounting and Taxes
**Created:** [March 23, 2019, 12:02am UTC](https://www.mineralrightsforum.com/t/cost-basis-estimate-for-inherited-mineral-rights-in-eddy-co-nm/43490 "2019-03-23T00:02:54Z")
**Posts on this page:** 5
**Page:** 1
### Author:  [@TerryinAZ](https://www.mineralrightsforum.com/u/TerryinAZ)
#### Post date: [March 23, 2019, 12:02am UTC](https://www.mineralrightsforum.com/t/cost-basis-estimate-for-inherited-mineral-rights-in-eddy-co-nm/43490/1 "2019-03-23T00:02:54Z")
I inherited about an acre of mineral rights in the NE/4 Section 35 Township 23S, Range 27E in Eddy County, New Mexico in January of 2005. I sold the mineral rights in January of 2018.
The mineral rights were leased for oil and gas and under production. My royalties the first 12 months I have record of (July 2004 to June 2005) were $106.30. The last 12 months (June 2016 to May 2017) were $6.09.
Is there a way that would be acceptable to the IRS to estimate the January 2005 value (basis)? At my income level I don’t owe any federal capital gains tax. However, I will owe Arizona and New Mexico taxes if I use a 0 cost basis.
My guess is that if I hire a mineral appraiser, it would cost more than the taxes due.
Thanks.
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### Author:  [@gingerbread](https://www.mineralrightsforum.com/u/gingerbread)
#### Post date: [April 24, 2020, 4:04am UTC](https://www.mineralrightsforum.com/t/cost-basis-estimate-for-inherited-mineral-rights-in-eddy-co-nm/43490/2 "2020-04-24T04:04:34Z")
@TerryinAZ Hi there. I have a similar inheritance situation. Did you find any resolution here like an appraiser, or did you go with just the $0 cost basis? Thanks so much!
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### Author:  [@TerryinAZ](https://www.mineralrightsforum.com/u/TerryinAZ)
#### Post date: [April 24, 2020, 5:13am UTC](https://www.mineralrightsforum.com/t/cost-basis-estimate-for-inherited-mineral-rights-in-eddy-co-nm/43490/3 "2020-04-24T05:13:50Z")
After looking up the IRS requirements for establishing mineral estate values it appeared very difficult to do and if an appraiser was able to do it, probably very expensive. I was able to claim it as a long term capital gain, 0% in my tax bracket. I did have to pay Arizona and New Mexico taxes, much less than what I imagine an appraisal would have cost.
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### Author:  [@gingerbread](https://www.mineralrightsforum.com/u/gingerbread)
#### Post date: [April 24, 2020, 4:43pm UTC](https://www.mineralrightsforum.com/t/cost-basis-estimate-for-inherited-mineral-rights-in-eddy-co-nm/43490/4 "2020-04-24T16:43:47Z")
@TerryinAZ Thanks for the reply. I really appreciate it! I think I’m in the same situation. Best!
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### Author:  [@MRFAdmin\_SV](https://www.mineralrightsforum.com/u/MRFAdmin_SV)
#### Post date: [January 11, 2025, 7:12pm UTC](https://www.mineralrightsforum.com/t/cost-basis-estimate-for-inherited-mineral-rights-in-eddy-co-nm/43490/5 "2025-01-11T19:12:36Z")