Intangible Drilling and Development Cost

Intangible Drilling and Development Cost

About Intangible Drilling and Development Cost:

The Intangible Drilling And Development Cost (IDC) is the cost incurred in drilling, testing, completing, and reworking oil and gas wells, such as labor, core analysis, fracturing, drill stem testing, engineering, fuel, and geologists' expenses; also abandonment losses, management fees, delay rentals, and similar expenses. IDC can be written off as a current expense or capitalized and recovered through depletion and depreciation. A taxpayer who has elected to deduct IDC currently has an additional option to amortize part or all of IDC over a 10-year period and thereby avoid any tax preference item for alternative minimum tax purposes. Former IRC (check if this IRC provision is current here) §§263(c), 59(e), and 1254(a).

See Depreciation in the United States Encyclopedia of Law and Depreciation in the World Encyclopedia of Law.


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