Level 11
03-08-2022
02:15 PM
- Mark as New
- Bookmark
- Subscribe
- Permalink
- Report Inappropriate Content
It's worse than you think! Your client's adjusted basis is almost certainly zero - the original 706 valuation less depletion over the years. Your client has ordinary income to the extent of that original 706 valuation, and capital gain for the excess. A low original basis is what you want to be hoping for.