My mother had inherited mineral rights from her mother 30 years ago here in Oklahoma. Never really produced much over $150-$200 per year. In turn, in April 2021 at her death, my brother and I was willed 4 of those mineral rights properties. Her grandson was willed the other 4. My brother and I immediately began the process of selling our mineral rights. My question… We have no idea of valuation until the company offered all the owners of the mineral rights in our family a certain amount. Could that offer be used as cost basis valuation for mineral rights?
Visit with a CPA on this. You should find that you are entitled to a stepped-up basis with the valuation date being your mother’s death. There may be some IRS rule presuming that the actual sales price is the basis if the sale occurs within a certain time frame. Otherwise, you may want to have the minerals valued. If producing there may be a rule based upon the last year’s income.
This is definitely not legal or tax advice, just things to ask your tax professional. Use a CPA!
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