We recently sold mineral rights in Texas that we inhereted from family members. Partial inheretance in 1999 and then another amount inhereted in 2004. I want to make sure we have plenty set aside for taxes. Our tax preparer told us that the sell of mineral rights was considered income and it would place us in a new tax bracket for this year. We received just under 300,000. and they are telling us to expect to pay anywhere from 85,000 to 100,00 in federal income taxes. I keep seeing on line that the sell of mineral rights is taxed as captial gains and not income. I am really confused and don't know who or what to believe. Can someone please advise me on this topic?
Consult with a CPA. After confirming that it is capital gains, fire your tax preparer.
It sounds very much like you were going to Tax In the Box. Who knows how much they have cost you in the past?
Rick is right you need a new tax preparer, a good CPA
Tina,
Good comments from the Forum Members. Once you find a good CPA familiar with real estate transactions, ask him or her about documenting the asset value at time of death of the giver. It may be a deduction from the revenue in certain cases.
Wow! I feel sick---we have used these people since we were married. (25 years). Even drove an hour each year to use them for tax prep. My husband's family used them for years. Yea, one phone call last week left me very puzzled. Inexcusable for them to be wrong about this type of information. I will be shopping around.
r w kennedy said:
It sounds very much like you were going to Tax In the Box. Who knows how much they have cost you in the past?
Maybe a call to the BBB would advised. It might not be their first attempt at fraud.
A longtime local CPA did income taxes for a friend of mine who works in multiple states. He's paid into the IRS a significant amount every year that he used them. I advised him of another local CPA with more experience in complex situations (like his) and he has either gotten a refund or paid far less to the IRS the past few years. The new CPA was fully aware about deductions and multi-state tax situations that they were able to take advantage of that the former CPA did not.