Mineral rights sold in 2014 and receive 1099

Did anyone get a 1099 for mineral rights they sold in 2014?  If so, what kind of 1099 was it?

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Permalink Reply by brat on February 28, 2015 at 3:55pm

None here so far.  Have a call into Bounty.

Permalink Reply by jonathan M. on February 28, 2015 at 5:10pm
You won't receive a 1099 from them. Selling mineral rights is a sale of real property. Just like when you sell your home the purchaser will not issue a 1099. It's up to you to report the money earned.
Permalink Reply by Jonathan H on March 2, 2015 at 5:55am

Under IRS laws, there are circumstances where a 1099 must be issued for property sales - though in many cases the lawyer handling the closing will assume it is unneeded due to the capital gains exclusion.

For a large amount, such as a mineral rights sale, I would push for a 1099 if I were you so that you have a paper trail for your records and an audit, if you are unlucky enough to get one. If the rights sale was for a large acreage that gave you a one time only income over $200,000/ year I would have all my paperwork in line for an audit, and if it was over $1 million in that year, I would expect an audit.

Getting a 1099 also makes sure that the right information went to the IRS; which box which amount goes in can effect your tax rate and whether certain expenses get deducted.

Permalink Reply by Rose Paratto on March 2, 2015 at 7:04am

Thanks for the reply, Jonathan H.   Can you please elaborate what you mean by capital gains exclusion? 

 

 

Permalink Reply by Jonathan H on March 2, 2015 at 8:09am

When you sell a house, if you have lived in it for 2 years out of the last 5, you don't have to pay taxes on the first $250,000 of gain ($500,000 for couples) - last year I sold a house I had lived in, then rented, and I was sent a 1099 even though I could claim this exclusion.

I assume the exclusion only applies to surface property and not mineral rights, but I am not a lawyer or an accountant. I could be wrong.

Permalink Reply by Rose Paratto on March 2, 2015 at 2:32pm

Thanks again, Jonathan. You have been very helpful.

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