Sold Section 36, Tnshp 10N, Range 9W in Okahoma. Need to establish basis at time of inheritance, late 2019. Curious why the buyer would not have any history, but I’m getting nowhere with them. Thoughts?
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If you inherited or purchased the minerals, Your basis is the market value at the time of acquisition less 100% of the depletion which you have deducted on your tax return. Your after-depletion basis can be reduced down to, but not less than, zero. If the estate did not have an appraisal to establish basis, then you need to find an appraiser. The appraiser can establish the value based on the producing wells in 2019 or if the minerals were not producing, then determine what minerals were selling for at that time. The IRS expects mineral owners to keep track of the basis over time. Your buyer will not know the basis of your inheritance or how much depletion you have taken over the years.
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