Owner just turned 90, and she’s wondering whether to sell mineral rights. We have shares in three producing vertical wells in Section 18. Can you give us a sense about prospects for the future on this eastern edge of the Permian? Activity seems to be heating up, but I wondered if pipeline capacity is restricted?
Just a suggestion, but unless she needs to sell, she might want to pass it family. Her tax burden is likely to higher from a capital gains point of view. If she passes it on in a will, the persons receiving it get a step up in value and if they sell in the future, the capital gain tax (after a year) would be lower.
Thank You, M Barnes. Good advice. she inherited the Rights in 1975, so cost basis is around zero. Thing is-she’s not planning on passing anytime soon.
This link http://wwwgisp.rrc.texas.gov/GISViewer2/index.html?api=22736938 will open the RRC map viewer on a well in your friend’s section. Use the vertical bar magnification slider on the left side of the map to zoom out a bit and see two permitted horizontal wells terminating on the north section line of Section 18. And, depending on her income, it appears what she might pay on a long term capital gain could be as low as zero https://www.bankrate.com/investing/long-term-capital-gains-tax/ Get a learned opinion from a CPA before moving forward.