West Virginia preparers - Help

[oceanlovin'ea]

I am trying to establish some sort of basis for coal, oil and gas interest in some property sold in Nicholas county.
The rights were inherited from client's husband in 2006. Now the whole kit and kaboodle has been sold.

If you can help, email me or send me a PM or just answer here.

I really need to figure this one out.

Linda, EA

[oceanlovin'ea]

Back up to the top.

Please help.

Linda, EA

[Dusty2004]

Inherited

I am trying to establish some sort of basis for coal, oil and gas interest in some property sold in Nicholas county.
The rights were inherited from client's husband in 2006. Now the whole kit and kaboodle has been sold.

If you can help, email me or send me a PM or just answer here.

I really need to figure this one out.

Linda, EA

Since they were inherited in 2006 that would be the basis. What was it valued at then? What does an appraiser who knows oil, gas, coal say it's value was then?

Dusty

[Lion]

Previous

Was any of the land sold previously? Did they research the rights cost basis at that time. Or, did they use ALL the cost basis against that sale, leaving 0 for now?

[oceanlovin'ea]

Yes, the land was sold previously. I have no idea when. I can ask the TP if she knows when it was sold. I have been doing the returns probably since 2004 and I don't remember any sales of land. Even if they sold the land, the heirs all held the mineral interests. That was not sold with the land.

The land is in Nicholas County. I thought about calling the county appraiser to see what he says.

Linda, EA

[Lion]

Basis

They might have used up all their basis when they sold the land and not allocated any of the basis to the mineral rights. A bird in the hand.... So, now they have zero basis left to use when selling mineral rights.

[oceanlovin'ea]

update

I talked to lady in assessor's office in Nicholas county west virginia. She remembered the sale but her computer is down till the 16th. Something about updating the system.
She asked if they paid taxes each year.

Called Client and it turns out they did and she dropped the tax receipts. From the tax receipts we will be able to establish a basis in 2006.

I'll let you know how it turns out. Just keep asking questions and you get answers...at least sometimes.

Linda, EA

[Burke]

So -- even though the land was sold, the holders of the mineral rights still pay taxes on them? If so, that makes it relatively easy to establish a stepped-up basis at DOD. Interesting.