If you inherited the mineral rights in a prior year and have taken a tax deduction for depletion on your tax return(s), then the sale of the mineral rights would not be subject to recapture because you received a step-up in basis when you inherited them. In this case you would only need to report the sale on Form 8949 and Schedule D.
According to the IRS:
The basis of property inherited from a decedent is generally one of the following:
- The fair market value (FMV) of the property on the date of the decedent's death (whether or not the executor of the estate files an estate tax return.
- The FMV of the property on the alternate valuation date, but only if the executor of the estate files an estate tax return (Form 706) and elects to use the alternate valuation on that return.
**Say "Thanks" by clicking the thumb icon in a post
**Mark the post that answers your question by clicking on "Mark as Best Answer"
