Valuation of Leases

When my brother died in 2017 he left his shares of oil leases to his wife. Now she wants to sell and needs to know the value at the time of his death for capital gain purposes on her taxes. How can we find their value at that time?

Welcome to the forum, and condolences on the loss of your brother.

The most likely solution for her is a “retrospective mineral appraisal”, which an analytical independent fair market valuation an engineer or CMA can provide. There are some other methods that are cheaper to obtain but can result in a lower appraised value than true market value since they’re usually conservative and related to taxes on producing properties only. If it’s more than $50-100k of mineral sales, it probably makes sense to go through the process for a formal retrospective appraisal.

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Also, is she working with a CPA to know her specific tax situation and state property laws? The CPA won’t be able to provide the appraisal but the appraiser won’t know the ins and outs of tax law either. She’ll need guidance from both for the best outcome.

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