Mineral rights sale on inherited land 1099-S

Forum|Forum|2 years ago
February 6, 2024
5 replies
37 views

I'm having a tough time trying to figure out how to process this 1099S. This resulted from a sale of mineral rights from an inherited piece of bare land in WV. The total sale was $3501.00. There are a total of 13 inheritors for this one piece of land and my wife was one of them. All we have is a parcel description for what was inherited by my wife to go off of -- no address.

We are an older couple and do not normally choose to itemize deductions because our mortgage interest is very low and we don't pay property tax due to my being 100% VA Disabled. Our tax liability is already $403 due to my SSA checks and to not use the standard deduction would cause our tax liability to increase significantly this year.

What do we do?

Thank you SO much in advance for responding!

TurboTax PLUS Online

AmyC

Alumni - Intuit

[Edit for TY24 - enter the mineral rights as sale of business property on Form 4797 instead. 4/11/2025 | 5:51 PST]

Your 1099-S will be entered as a sale under investments. The steps vary depending on the program and version but you can find what you need since Personal income covers Investment Income which has subsections and we need to get to Other to enter the sale. You will end with Land (other investment purposes).

For your online version, these steps will help get you there:

Answer Yes on the Did you have investment income in 2023? screen, then Continue.

If you land on the Your investments and savings screen, select Add Investments.
On the next screen, select Enter a different way.
On the OK, let's start with one investment type screen, select Other (land, second homes, personal items), then Continue.
On the Tell us more about this sale screen, enter the name of the person or institution that brokered the sale.
On the next screen, select Land from the first dropdown menu, then enter the rest of the info for your sale, and Continue.

Once you reach the screen and mark inherit, you need to be careful. Things are a little trickier for you.

The description can be simply mineral rights. These qualify for capital gains treatment instead of ordinary income.

Date sold - enter the date on the 1099-S

Proceeds -with so many inheritors, did each get their own form 1099-S as they should have or did one person get and subdivide by appropriately sending 1099-S forms to the others with their share? You need to enter YOUR share of the proceeds only.

FMV when owner passed - enter your portion of the value - for example, the land was worth $130,000 upon passing divide by 13 inheritors and your basis would be $10,000. Figure out your basis and enter it here.

Continue

If there were selling fees, commissions paid, select paid expenses and add those. Otherwise, select None and continue. You may need to ask the person who sold the land.

This has nothing to do with itemizing deductions so unless you have something unusual this year, you are allowed to take the standard deduction if that is higher and better for you.

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sanantoniorocksAuthor

Level 2

Thank you so very much for your time and effort and responding! I will go through this process this weekend and post another reply. We are very grateful!