Mineral Rights Donations

[_just me]

Hi everyone!

I learned something I thought was interesting yesterday.

A woman I know used to work for the church in the mineral rights department (or whatever it would be called). She said that the IRS audited them while she was there.

The problem was that the church would claim that each claim/right was worth $1. The member who donated the claim/right could claim on their taxes whatever value they thought was right or wanted to.

Why would the church value every mineral right donated at $1?

[_sock puppet]

$1 is probably just a nominal amount ascribed to each such right. Laziness, and cost saving--no need to hire an appraiser. The IRS has probably been able to use that $1 as some (not conclusive) evidence against the contributor as to the value at which the contributor should rightfully get a tax deduction.

[_GR33N]

Until the mineral right starts producing (if ever) there is very little value. The member who donated is just guessing it's value in my opinion.

[_sock puppet]

Until the mineral right starts producing (if ever) there is very little value. The member who donated is just guessing it's value in my opinion.

So if you were an IRS agent auditing the LDS member who contributed the mineral rights and claimed, say, a $1,000 deduction for one mineral right, would you disallow the deduction?