Does anyone know how I get an appraisal for mineral rights I just sold for the date July 2015 when I inherited the mineral rights? Thanks
Was there a probate inventory that listed the value of the property, or a federal estate tax return filed that included a value for the property. You have the burden of proof to establish your basis in the property. The value of the property will affect your options. If there is substantial value, then hire an oil and gas appraisal firm. If there is not substantial value, a landman may be able to help you. If amount involved is not substantial, the rule of thumb approach may assist you, which is to multiply the average yearly production for the three years preceding death by a factor of 3-5 depending on whether production is increasing or decreasing.
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You didn’t mention where those minerals were located. Whether they were producing or leased at the time you inherited them would make a difference. If they weren’t, and it wasn’t an area with active production or exploration going on, then assigning much value to that interest may be difficult.
If there was activity at that time and you are up for some research you could check the County records for deeds covering sales of mineral rights around 2015. Prices typically aren’t shown but if you find sales in your area you can see if those sellers will share that information.
No legal advice intended. But as sclausen said, you have the burden of proof, and if the IRS decides to review and questions the basis shown on your return you’ll want to have a method and detail backing it up.
Thank y’all for helping. From what you’ve said I think I need a professional appraiser. I will check if there’s a valuation at the time of her death first. I sold half of it in two separate sales, but no capital gains was owed. This was a substantial amount for the last part, but oil is very high and it wasn’t then.
Not sure how you could have determined that “no capital gains was owed” on those sales without knowing your tax basis on the interest you inherited?
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