Is the money received from selling mineral rights taxable?

I inherited 1-1/2 acres in Harrison County Ohio. Cannot find anyone to lease this,but have found someone to buy the mineral rights. With out consulting an attorney now,will I have to pay taxes  on the money received if I sell  this inherited land?

Views: 3378

▶ Reply to This

Replies to This Discussion

Permalink Reply by evan on December 4, 2013 at 9:47am

If you sell the minerals it's like selling real estate.  You ll have to pay capital gains taxes.  If you've owned it for more than a year you can do a 10/31 like kind or kind like exchange , can't remember which words first. In that process you can purchase more real estate and not pay any taxes if it's the amount you recieved for selling.  I've heard you can also invest in other things to avoid taxes but im not sure what all qualifies .

Permalink Reply by williet57 on December 4, 2013 at 9:54am

I sold the house and land  but kept the mineral rights

Permalink Reply by evan on December 4, 2013 at 10:02am

I believe that if and when you sell the mineral rights you will pay capital gains on them. Not many ways around it ..

Permalink Reply by scott jackovitch on December 4, 2013 at 11:38am
If you have owned the property for more than a year you will most likely pay long term capital gains tax . Not short term . Depending on your annual income it can be as low as 15%.
Permalink Reply by stephen weiss on December 4, 2013 at 1:31pm
I am neither a lawyer nor accountant, but I certainly have paid many bucks in taxes.

I believe that if you inherited the land and mineral rights, you probably will only owe long term capital gains on the difference in value (appreciation) from the time you inherited the property until the time of sale. NOT on the full sale price!

The issue of state tax will vary depending on the state law.
Permalink Reply by Frank Walker on December 5, 2013 at 4:01am
For Federal tax: Your basis in the property is its value at the date of death of the person from whom you inherited. You sold the property but kept the mineral rights. So to figure your cap gains tax, add the amount of your property sale to the amount of your (projected) minerals sale. If that total exceeds your basis in the property, you will pay cap gains tax on the difference. If that total is less than your basis in the property, you have a capital loss which will save you on tax.

State tax? Dunno. It is gonna depend on the laws in your state.
Permalink Reply by Renee E. Dorsey on December 5, 2013 at 5:49am

Not sure if it is worth putting it into a trust, but might be something to look into.   

Permalink Reply by Brian Delphia on December 5, 2013 at 12:11pm
Approx about 28% tax when all said and done. Capital gains plus state!!!

RSS

© 2024   Created by Keith Mauck (Site Publisher).   Powered by

Badges  |  Report an Issue  |  Terms of Service