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Robin D.
Robin D., Senior Tax Advisor 4
Category: Tax
Satisfied Customers: 15747
Experience:  15years with H & R Block. Divisional leader, Instructor
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I want to sell mineral interest. My Father-in-law left it to

Customer Question

I want to sell mineral interest. My Father-in-law left it to me. There was no wells on it in 2012. Now there is 5. The access value that Martin county, Tx is 67,000. I'm sellinh it for 28,926. would that be a capital gain or lost. and what % of taxes I would pay.
Submitted: 2 years ago.
Category: Tax
Expert:  Robin D. replied 2 years ago.

You take the basis when you inherited and then subtract the depletion over the years and that is your new basis.

The difference in that and the $28,926 is gain (or loss). Tax will be capital and the rate will be based on your total income and filing status. Your rate of tax on a gain could be 0%, 15%, or 20%.

You will need to first determine your basis and that may require you going back over your tax returns to subtract depletion.

Customer: replied 2 years ago.
How do I know what the depletion is and how many years
Expert:  Robin D. replied 2 years ago.

The depletion would have been for every year with the wells as the resource was removed.

Generally, if your average daily production does not exceed your depletable oil or gas quantity, you would have figured your percentage depletion by multiplying the gross income from the oil or gas property by 15% each year.

Your tax return information for each past year should have the depletion listed.