While I do not have a full and complete understanding of your situation due to your state imposed inheritance tax, I can only pharaphrase to you how the IRS sees things at the federal level when it comes to dealing with an inheritance at the federal level. What effect your state's treatment would have on the laws at the federal level as I understand those laws, I don't know and really can't say. But basically, the IRS says this:
An inheritance is not taxable or reportable on any tax return (with exceptions, such as an inherited 401(k)). Period. What is not taxable is the FMV of the inheritance on the day the original owner passes away. However, all accumulated earnings on that inheritance that occur after the passing of the deceased, are taxable income to the beneficiary recipient.
So as I see it, if what you inherited was worth $500 on the day of the owner's passing, it's value today is irrelevant. For example, take stocks. The stock may have been worth $500 on the day of their passing. But today, it's worth $1000. You will not pay *any* taxes on that value. However, if there was a dividend payout in 2018 for that stock of say, $1 per share, then that $1 per share would be taxable income to you.
Now if you sell the stock for $1000, then your costs basis of that stock is the FMV on the day the deceased passed, which would be $500. So in the tax year you sell it, you would only pay taxes on the $500 gain realized from the sale.
So the "value" of the royalty today doesn't matter. But the "payout" from that royalty to you, would be taxable income. So until you sell your rights to that royalty income, the "present value" of those rights really doesn't matter.
