How does the IRS value fracked wells, for estate purposes.
I have 7 producing wells. 1/2 interest in 4 wells & 1/4 interest in 3 wells.
The IRS does not value them. And you value interests in the minerals, or working interests in the well not the individual well per se. You have to do that yourself. "Fair Market Value" is established by appraisal and you have to defend that value should the IRS decide to contest your valuation. See your CPA. PS- a rule of thumb (such as summing three years of annual income ) may be reasonably accurate but the IRS can challenge such methods and likely would if audited. I don't work NM, so hopefully you don't think I am soliciting work, but generally you need good records to get an accurate appraisal. Not every appraiser can value minerals and many who do, don't know what they are doing. And engineering appraisals tend to be quite expensive. If a small interest, a CPL landman may be able to help. There used to be a mineral appraiser in Roswell, Shulenberger or something like that if he is still in business.
http://www.roxnoil.com/wpadmin/index.php/minimum-necessary-for-mine...
Horace, give me a call. I can’t post my number on here, but if you google me you can find my website and cell. Joe or Lela will have my parents number as well.