Since 1971 and through this year {2014} , I have inherited in bits and pieces mineral rights from grandparents, parents, and aunts and uncles. I have been trying to sell them , but due to the present market , I cannot get nearly what I think they are worth. If I do sell them, how will I figure basis VS. price rec'd when tax time comes around. There is no appraisal at either end of this 43 year period of time. I think they should be worth $2500 an acre, however, best offer has been around $1100 an acre. Thanks for your help, An aging W.Va. hillbilly.
Basis is the value at the date of death. Even if it were 43 years ago, there is a basis. If you did not define a cost basis, (or the estate did not have an inventory valuation of these assets), then you need to compute a basis. Try 3-4x the bonus rates at the time of death. You could assign a basis of 0 and the feds would not complain.
Buddy Cotten
How do I find out what the rates were at time of death? Particularly I am looking for Jan 2004.
thanks.
Dear Ms. Grossman,
If this were my assignment to complete, I would ascertain leasing activity in the county where the properties were located, contact the Lessors of leases around January, 2004 and contact them, telling the reason for your inquiry and see if they will disclose the bonus per acre at that time.
Earlier, I mentioned that I would inspect the inventory of the descendant's estate to see at what value the minerals were appraised. That would be your cost basis.
Buddy CottenThank you so much. Unfortunately sometimes people don't keep records they are suppose to. What would the fee be for finding this info.
Buddy Cotten said:
Dear Ms. Grossman,
If this were my assignment to complete, I would ascertain leasing activity in the county where the properties were located, contact the Lessors of leases around January, 2004 and contact them, telling the reason for your inquiry and see if they will disclose the bonus per acre at that time.
Earlier, I mentioned that I would inspect the inventory of the descendant's estate to see at what value the minerals were appraised. That would be your cost basis.