Even though the mineral rights were inherited, once depletion has been claimed the sale is not reported on Form 8949. When mineral property has depletion, the sale is subject IRC§1254, which requires the transaction to be reported on Form 4797.
The depletion allowed/allowable is recaptured as ordinary income on Form 4797, Part III. The remaining gain, if any, flows from 4797 to Schedule D. The recaptured depletion flows from 4797 to Schedule 1, then onto line 8 of your 1040.
In TurboTax, enter the sale through the Rental & Royalty Income section, if you had the property previously listed there. Otherwise, go to the Sale of Business Property section. You'll enter its basis when inherited, sales price and confirm the depletion amounts.
@Bridgesh73
**Say "Thanks" by clicking the thumb icon in a post
**Mark the post that answers your question by clicking on "Mark as Best Answer"
