Tax Rate on Sale of Mineral Rights/Determining Value

I Inherited mineral rights in 2009. Currently producing and receiving royalty checks.

If I sell all of them now, what will be my tax rate on selling? Simply capital gains tax of my tax bracket? Or is there more to it than that?

Or do I pay a tax rate on the value at inheritance vs. today's value?

If so, how do I determine the value at inheritance and then today's value? And then what rate would that be taxed? Also if that is taxed do I still pay a capital gains tax on top of this?

Please help & thanks in advance to anyone answering.


First let me state that I am NOT an accountant nor an attorney. My first recommendation would be for you to consult an estate attorney in the state in which the minerals are held. That said...

When working with estates, my experience has been, the valuation of WV minerals is what is based on your property tax statements. In WV the listed value is 60% of the 'true valuation', so if your tax bill states a $300.00 valuation, then the actual value would be $500.00. (300.00 / .60 = 500.00)

I find this to be an extremely inaccurate manner to calculate a true Fair Market Value, but this seems to be the standard accepted practice in West Virginia.

Hopefully you have the property tax records from the year you inherited the parcels, as a base price to use in calculating any appreciation or depreciation of value. I believe you would only be assessed capital gains taxes, but again must reiterate the importance of consulting an accountant or attorney in the State the minerals are held.

Good Luck

Thanks for the reply. I probably should have added some additional information.

Since 2009 the rights have been in a family trust which I have been paying taxes on each year.

I read that if I sell them that I have to take the valuation of the mineral rights at the time of inheritance and pay taxes on what ever the difference is on the valuation as of the date of when I sell them?

Make sense? If that is the case, how do I determine the value from 2009 to present day?

Or is it just a flat capital gains tax once I sell based on my tax bracket?

Again, I am Not an attorney or accountant...

If I were in your shoes, I would look at the assessed value of the parcels in 2009 and subtract that from the current value associated with the tax tickets of those years. That would be the basis of your capital gains (loss) tax.

You have not stated where the parcels are, but some of the county websites in WV have tax receipts available, going back to 2006.