My sister and I have learned that we have inherited 56 plus Acres of mineral rights in Midland County. I am looking for advise. My sister is looking at using Simon Energy to help us market out property. We have received several offers?
We have been told a few things and I am just looking for clarification. When is the best time to market mineral rights? One broker has told us that between Memorial Day and Labor day generally speaking, most companies are on vacation and we wouldn't get as much for our mineral rights as if we waited until after Labor Day Weekend.
Second thing I am wondering is taxes on sales from Mineral Rights sales. Is the current tax rate 30% or 15%? I have been told both by different parties.
Any advise, suggestions, or comments would be greatly appreciated. I just want to make sure that we are making the right choices. Below will be a list of the property descriptions.
Sabrina - Simon Energy Associates is a well respected company from what I know. Memorial Day to Labor Day is one heck of a vacation and I don't know if I would give that any serious thought. Serious, professional buyers won't stop buying for 3 months so they can go to Cape Cod or something like that.
If your minerals are subject to long-term capital gains (held longer than one year) then the rate on the taxable gain is 15%, with some possibly being taxed at 20% if your total taxable income is great enough. You will also likely have to pay the Affordable Care Act investment income surtax of 3.8% on the net gain on sale, making the total rate between 18.8% and 23.8%.
In general those are some really good minerals to own. Take your time.
There are several companies you could use/work with, I have had great experiences with some, not so great with others. I agree with Marcus, don't give the 3 month vacation any thought. As for the tax, hes correct also. But you could also do a 1031 exchange, if you buy another investment property. Or you could sell only a portion, to make sure you stay at the lower tax rate. Or you could not sell at all, and wait and see what happens.
There's also a good chance that long term capital gains taxes might not come into plain since they've been inherited recently? I'm not sure, just thinking out loud.