How do I find out what the mineral rights were worth in a certain year for mineral rights I sold? TIA
From your question I’m guessing you may be trying to figure a cost basis for inherited mineral interest that you later sold. There’s no simple way to do that, but that same general question has been discussed in other parts of this forum many times.
If you’ll click the looking glass feature at the top right side of this page and enter a phrase like “Establishing past value of mineral interest” you should be able to pull up several of those previous discussions.
Thank you. I appreciate your reply and for pointing me in the right direction
To clarify, I sold net mineral acres last year and am needing to know what the mineral rights were worth in 2017?
You may not be asking the correct question.
What is something worth? “The value is what a willing and informed buyer under no compulsion to buy and what a willing and informed seller under no compulsion to sell agree to.”
What is something worth with regard to capital gains or IRS purposes has a different meaning. If you inherited, then the minerals are worth what they were worth as of the date of death of the person that you inherited them from ( or six months later, whichever is higher). That requires a bit of work in ascertaining and you need an historical evaluation. For example, if you inherited from a parent in 2000, then the “step up” value is set as of the date of death, not what they got them for back when they bought or inherited them. If you sold them in 2017, then they were “worth” what you sold them for, but the capital gains would be calculated opon what the value was at date of death minus the sales price. They may not have been “worth” as much in 2000 because horizontal drilling may not have been in your area. You might have a higher capital gains since they were worth quite a bit more in 2017 than 2000.
Use the search tool on the upper right to get further explanations and then you can form your question more specifically.
To Dusty and Martha’s points, do you need to know the value in 2017 because that’s the year you inherited them? Or for some other reason? The “why” behind that will help guide our answer of how to get the value.
Simply put though, if you owe a substantial amount of capital gains tax from the sale (in the thousands), it’d probably be worth talking to an appraisal professional to determine the most cost effective valuation method. If it’s just for a small transaction you’re trying to minimize taxes on, more info here or a search on the forum is likely your best bet.
Your responses have been helpful. Yes, I’m asking for tax purposes. I inherited net mineral acres after my dad passed in 2016. I sold them in 2020 and now trying to figure out what the net mineral acres were worth after he passed, for filing taxes on the sale in 2020. From searches in this site, as you have suggested, it looks like I would need to follow up with an estate attorney or an appraiser. Had hoped it would be info found in public record. Silly me.
You can observe qualified professionals (often with localized expertise) who provide services to mineral owners right here on The Mineral Rights Forum. You will notice them among 3 different instances on the site:
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in display image ads and/or brief text messaging on site
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in our Mineral Service Provider Directory in the main navigation above. These are arranged by professional discipline.
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as a Business Member participating in many conversations throughout the site (note the blue colored “B” on their picture and blue text on their posts).
These practitioners are often able to provide the specific (and often localized) services that meet your needs.
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Not silly at all. If the minerals were producing in a state with property tax, yes, you can get a value out of public record (go to the taxed value for that year), but it’ll be the lowest value out there. The state taxes on the producing market value, and for capital gains you’d want total market value since that’d be producing value + acreage value (= higher value = less taxes). But this might make sense to do in some cases.
Luckily 2016 isn’t too long ago. Twenty years ago would be a different (but common) story.
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