Global

Details

  • Service: Tax
  • Industry: Energy & Natural Resources, Oil & Gas
  • Type: Business and industry issue
  • Date: 7/11/2011

Alternative Minimum Tax – Intangible Drilling Cost Preference 

This article explains the background and application of the intangible drilling costs preference and discusses how oil and gas taxpayers can reduce the IDC preference.
Alternative Minimum Tax
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Under the alternative minimum tax, a tax preference applies to intangible drilling costs incurred by taxpayers in the oil and gas industry; these costs must be added to taxable income to determine alternative minimum tax income.


The article also analyzes the exclusion for costs attributable to nonproducing wells, noting the lack of a clear IRS or congressional standard or definition for the term “nonproducing well.”

 

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