I am selling some inherited mineral rights , do not know where to find out their value at the time of inheritance, and would like to know to whom or where I can go for solid tax liability info.
Were they producing at the time of inheritance?
Was the estate probated? If so, the value should have been set at that time
No, they were not producing. The estate was probated but I have found no estimates file, just the division of property between my Sis and me. I have found no filings that state the value of the surface or the minerals that went with them. I sold the surface,but retained the minerals. This was back in 1978. I am wondering if there is a site that listed value of minerals in Beckham Co. in that year.
I am sure the estate was valued and it is listed on some paperwork that must have been filed with the County Clerk but cannot find the filings for these. Would it be listed in probate court, I wonder.
A "County Clerk" in Oklahoma will usually only have access to the property records, which may or may not have the probate info you are looking for. You want to contact the "County Court Clerk" in the county where the estate was probated. They should have copies of the probate records.
How many acres are we talking about?
around 250
thanks for that info! I will call them!
i know we did not have to pay taxes on the surface that I sold.
If you are in the 25%-35% tax bracket, $75k-450k joint income (rounded and by memory so check) that would mean you will be paying 15% capital gains tax. Above that will hit you at 25%.
250 acres and they were valued at $100 per acre (which sould be high for 1978 non- producing rights, your total basis would be $25000. So you could save $3750 in taxes (at 15% rate) getting it evaluated. That may be worth calling in a pro and spending a few hundred to come up with a price for the basis if the probate does not reveal it.
If you had 10 acres and they were valued at $100 per acre your total basis would be $1000. So your tax liability would be $150 in taxes and not worth spending much time and money in research or trying to evaluate it. Then you would claim it as $0 basis and you won’t have to worry about it coming back to haunt you with the IRS.
Good luck with your search!
Honestly, I'm not sure how you would have avoided that unless it was worth less now than it was in 1978. That would be odd. Did not pay taxes at the time of sale, or did not get hit with a 1099 in the closing, or you presented everything to a CPA and they told you there was no tax liability?
joy Kelley said:
i know we did not have to pay taxes on the surface that I sold.
It may be because I sold it within a year of inheriting it, and the estate had no inheritance tax levied because it came under the criteria for inheritance tax. And it was 1985. I said 1978 but was relying on faulty memory. :) I paid no taxes on the sale of the surface because of that evaluation.
As I retired this year, I won't even by in the $75 k tax bracket.
So, know a pro I could call in? I'm ignorant of this particular field, but need advice. !! Thanks.
I did find the probate records are at the Court Clerk, and will call for copies today. It is so nice to visit with someone who knows something!
And I am in the single person tax bracket. I would just like to know what taxes I will be assessed, so that I can put it aside, you know.
I just saw that final decree was filed completed in 1988.
The basis on your surface rights you sold would have reset at inheriting it and should not result in a tax liability since you sold it quickly.
I'm pretty sure the sale of the property would be included in the tax bracket. That should have put you above those brackets which should result in 20%. However, I'm not 100% sure. You should consult a CPA on that and as the state tax liability.
See what you can come up with on the probate records. If you get a blank there, send me a friend request and I'll give you a couple of leads that might be able to give a fair market value base on 1985 market.
I doubt $50-$100 and acre would be questioned by the IRS or be very far out of line. I wouldn't expect it to be more than that. If they were leased during that time-frame, it could move the value up. But that would be difficult to produce records on if you don't have them already.
A probate I have in front of me from 1991 with acreage a couple of counties over is showing values in the $25-$100 range with very few going over that.
I would put aside 20% federal + whatever your state tax rate is. I would also ask a local CPA about sending in a portion as a quarterly tax payment. You "should" be exempt from penalty based on last years income, but it would be something I would ask about.
I'm not a CPA, but have been through some of this with surface rights personally and have helped a few in the same situation as yourself with mineral rights.
joy Kelley said:
I did find the probate records are at the Court Clerk, and will call for copies today. It is so nice to visit with someone who knows something!
And I am in the single person tax bracket. I would just like to know what taxes I will be assessed, so that I can put it aside, you know.
Thanks. I did sell some like mineral rights at the time there was a boom going on a bit before then for $100. an acre. I have the deed transfer copy, so will have to look up the date.
Thanks. I will friend request you on FACEBOOK?
That could help defend putting a $100 value as a basis at inheritance.
You can do it here. It is the only way you can send private messages. Right click on my picture. I don't recommend professionals publicly.
Facebook is fine if you prefer. You can search on rhowell309 to find me.
Will do. I didn't know one could do it on here. I sold those minerals in 1981, when there was sort of a boom going on in the area. Mom died in 85.
Your page says your are monitoring discussions?? Does that mean you cannot see me on that page?
Rick Howell said:
You can do it here. It is the only way you can send private messages. Right click on my picture. I don't recommend professionals publicly.
Facebook is fine if you prefer. You can search on rhowell309 to find me.