I was given mineral rights in Grady and McClain County Oklahoma and recently sold them. I know I need to pay taxes on the capital gains, but not sure how to determine the value in 2003. Thanks!
Hire a Certified Mineral Manager to determine the value when you received them. You sure sold great
minerals. Hope taxes don't eat you alive. Get a good accountant.
If the minerals were a gift, then your basis is the basis of the donor. If you received as inheritance through a will or purchased, then you get basis of value at that time. Regardless, you must reduce the basis by all the depletion that you have taken since 2003 to arrive at your basis at the time of sale. Your basis cannot be negative. I hope others are paying attention to the need to save related paperwork and to maintain annual records. This includes a spreadsheet where you start with basis on day 1 of ownership and deduct the depletion each year. This is an investment no matter how you acquired the assets and needs to be treated as such.
Thank you for your response.
Thank you so much for your response.