These are indeed tragic conditions, but bottom line is if we live by this rule, then we might consider putting our babies in rest homes, too, they are just as unable to care for themselves.
Chris We got a value for none producing royalty from the the OkLa Tax Comm. that we used for Estate Taxes. They have it valued by County. Producing is done by Three time the annual income for Oil wells And 4 times for Gas wells I think ,or it may be the other way around . They can tell you .
Ron M, is this something new? We have always been told that there is no value until the minerals come out of the ground, could this likely be a way for oil magnets into forcing us to sell our meager mineral rights, by all levels of taxation levying a tax on their value or projected value? I really think this might have been considered before, but it sort of boggles the imagination that these methods might be used. On the other hand, it should not come as any surprise, either. I always thought gold in the ground is worthless, etc.
Chris, Friend me and I can give you the name of an engineering firm in OKC that handles appraisals for oil and gas minerals in OK. You could at least call them and talk to them. I have used them several times for estate evaluations.
Ron & R W
I think Chris was trying to buy the minerals from her mother in order to save the family minerals. So, estate value can be used. That may only be a few hundred dollars, but once it starts producing, it may be several thousands. And I feel very sorry for your mother and her family. Maybe she will be better in a home and than can go back to her home.
Now about gold and diamonds. I sure can tell the differences. Guess I just like nice things. To me, gold is like land and oil, you never have to much.
Here’s some bedtime reading for you folks: “Examples of Additional Clauses for Oil and Gas Lease”. Actually, it’s a really good read, but long.
http://www.ag.ndsu.edu/agecon/NDOilandGasLaw/mineralowners/atom.xml
They have six months from first sale to start paying. After that they are to pay 12% interest . 6% if there is a title issue . I have had them pay without signed D.O. so it is hard to say .
ronald I guess you were told wrong.
r w I was talking about how to value producing & non producing for estate taxes .
I am not sure what Chris is trying to do . Just get it out of her Mom’s name ? Get her Mom some money ? What are we trying to do ?
Does she want to pay her mom top and have her pay tax on it and then give the to the rest home. Or do they want to keep the taxes down and just get it out of her estate. Is the interest big enough to make taxes an issue . At the time we got a value from OTC I thought it was fair to low and we were told it was good for value for Fed. & state . If she wants her to have a lot of money I don’t think anyone is going to say anything as long as it is over OTC . Does her Mom get Gov. help with the home when her estate is gone, if she has to stay there? Is Chris going to pay ? What are the options ?
http://www.nadoa.org/forms/div_ord.pdf
It is better to use this NADOA division order form if the company does not send their division order on this form. Make sure they do not change any terms of the lease. Do not put your EIN or SSN on this form since it can go public. There is no deadline to answer them, but it does go faster it you do. If you have a conflict in acres, call the DO analyst listed at the top of the form and ask them what you need to do to “cure title”. They will usually tell you. Ask them for the portion of the title opinion that pertains to your acreage. They will usually extract it out and send it to you. Then you can figure out how to solve the issue.
You can get a EIN # from the IRS online by going to irs.gov and tying the words online ss4 application then click on the spy glass to start the search. You can apply as a sole proprietor if you are just wanting to apply as an individual so you don’t have to use your SS# on the division order and do not have any type of business, trust or other legal entity that holds your mineral deed(s). The IRS will instantly issue you a EIN # and letter of record once you fill out the online form and submit.
Ron McKenzie,
I think Chris is trying to buy the minerals from her mother. Her mother is in a home and they want to keep the minerals and I don’t think they are producing at this time.
Martha McMorries
Are you sure about this?
You can get a EIN # from the IRS online by going to irs.gov and tying the words online ss4 application then click on the spy glass to start the search. You can apply as a sole proprietor if you are just wanting to apply as an individual so you don’t have to use your SS# on the division order anddo not have any type of business, trust or other legal entity that holds your mineral deed(s). The IRS will instantly issue you a EIN # and letter of record once you fill out the online form and submit.
Not having a business and applying for an EIN for the purpose you stated, “could” cause you some issues. Even if you do have a sole proprietor business and have been issued an EIN, the IRS “prefers” you to use your SSN. See W9 Instructions part I page 3 and the table of (page 4 footnote 3.) http://www.irs.gov/pub/irs-pdf/fw9.pdf
When you are applying for an EIN, Here are your choices for Sole Proprietor.
https://sa1.www4.irs.gov/modiein/individual/index.jsp
Choose one reason that best describes why you are applying for an EIN.
Started a new business
Select this option if you are beginning a new business.
Hired employee(s)
Select this option if you already have a business and need to hire employees.
Banking purposes
Select this option if the reason for applying for the EIN is strictly to satisfy banking requirements or local law.
Changed type of organization
Select this option if you are changing the type of organization you currently operate, such as changing from a sole proprietor to a partnership, changing from a partnership to a corporation, etc.
Purchased active business
Select this option if you are purchasing a business that is already in operation.
What would be your selection in your suggestion?
While I don’t like putting my SSN out there recklessly, I’m not a fan of going against IRS’s preference and would never recommend applying for an EIN if you don’t meet the guidance for issuing such a number.
For what it is worth. I am responsible for 5 EINs, 2 Multimember LLCs, A Sole Member LLC, A trust, and an estate. I consulted an attorney and/or a tax professional before creation (and in one case a modification) on some of these EINs.
Please post some documentation supporting your suggestion. I’m all about learning new things!
I have never seen a Division Order online and I am very doubtful that they would be public information.
Opps, that’s oil and gas mineral owner royalty interest.
Rick, My CPA told me the online EIN # application can be for a sole proprietor as a person acting in their sole capacity and you do not have to form an LLC, LP, S corp., C corp, DBA or any other type of business entity. I went online to check if she was right and sure enough there is a selection for sole proprietor where you can select other for what type of sole proprietor you are and put in oil and gas mineral owner royalty interest and get the EIN # instantly. You do have to use your SS # to get this EIN #. However, do not use a sole proprietor for a working interest(s) or a large royalty interest(s) or many small royalty interests, because you have no legal protection like you would if you formed an LLC or LP. My attorney said to Form an LLC for assets totaling under 1 million and an LP for assets totaling over 1 mil.
You have to submit a W-9 with your SSN or EIN. This is also not public information.
Thanks Victor and Virginia. Ronald, if you know a link to Division Orders on the internet, please share.
I wasn’t directly involved with Land Files, but I think if Shell Oil knew someone had access to them on the Internet, some lawyers would be getting very busy.
Harley,
The division order that NARO has is blank and you can fill it out. So, no attorney is going to care.
Virginia and Harley,
When I said I had never seen a Division Order online, I was referring to a statement that I thought someone made that you could see executed division orders online. Sorry that I wasn’t clear. I think someone stated that you shouldn’t put your SSN on the division order because it could be viewed online by anyone. I don’t think this is accurate but I could be wrong. Again, sorry for the confusion.