What’s the Fair Market Value of Royalty Interests in Oil and Gas Deep Rights?
Calculating un-drilled (non-producing) royalty interests in oil and gas deep rights for people gifting them to kids or to value estates can be a challenge. For many, there is the belief that these “can’t be worth anything.” Fortunately, these people will find that the accounting experts at Appalachian Basin CPAs, Inc. in Ohio have a true understanding of their position. The Pennsylvania Department of Taxation is sending letters to taxpayers that have had a real estate transfer, inquiring as to the increase in value of what they have transferred. If there hasn’t been any drilling done or additional expense put into the property, then no, there has been no increase in its value. However, that doesn’t mean what was transferred doesn’t have a fair market value.