Hello…
Sold acreage initiated years ago by geologist father. How do I figure taxes on property that was never purchased but was part of an oil proposal from which he kept a small percentage?
I inherited this percentage. Then sold it. Is it all cap gains or can something be deferred…?
Thanks
You would need to get an evaluation of its value for the time period you inherited the rights. So for example, if you got 100NMA in 2010 that were worth 1000 an acre at that time, and you just sold them for 2000 an acre recently, you would pay the tax on the capital gains of 1000 per acre, or $100,000 total. Long term capital gains is taxed at 15% I believe, if your income is under 480k(for married filing jointly) . It is 20% if yearly income is higher than that. If total income is under 77k, you are not taxed. Keep in mind, I am not a CPA, and this is not legal advice. Just info from my own research.
If the estate were probated, there would have been a value assigned to the assets. I believe basis is that value.
Doug
If you have a long term capital gain, this article has information and a calculator: