stepped up basis for mineral rights in estate

[L.S.]

Man died 9/2/10. Is there a stepped up basis on the mineral rights in this estate?

[Gail in Virginia]

From IRS website FAQ:

How do I calculate the basis of a decedent’s assets who died in 2010?

Generally, for the estates of decedents dying after December 31, 2009 and before January 1, 2011, the basis of assets acquired from the decedent is the lesser of the decedent's adjusted basis (carryover basis) or the fair market value of the property on the date of the decedent's death.

However, there are two exceptions to this general rule:

* The executor can allocate up to $1.3 million (increased by unused losses and loss carryovers) ($60,000 in the case of a decedent nonresident not a citizen of the United States, but with no loss or loss carryover increase) to increase the basis of assets; and

* The executor can also allocate an additional amount, up to $3 million, to increase the basis of assets passing to a surviving spouse, either outright or in a Qualified Terminable Interest Property (“QTIP”) trust.