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user1115551
Level 2

I had a partnership from 2005 that just closed out. Do I have to add the deducted Intangible drilling cost I took to the cost basis??

Are intangible drilling cost recaptured somehow?

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view2
New Member

I had a partnership from 2005 that just closed out. Do I have to add the deducted Intangible drilling cost I took to the cost basis??

The total amount of IDCs, within the meaning of Section 614 ,costs that you deducted and the deductions for depletion are generally 1254 costs subject to recapture as ordinary income to the extent of any gain realized on the disposition of the property.

26 CFR 1.1254-1 - Treatment of gain from disposition of natural resource recapture property

 tps://www.law.cornell.edu/cfr/text/26/1.1254-1

You are urged to seek advice based on your particular circumstances from a tax professional  which will help you make the most informed decision.

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view2
New Member

I had a partnership from 2005 that just closed out. Do I have to add the deducted Intangible drilling cost I took to the cost basis??

The total amount of IDCs, within the meaning of Section 614 ,costs that you deducted and the deductions for depletion are generally 1254 costs subject to recapture as ordinary income to the extent of any gain realized on the disposition of the property.

26 CFR 1.1254-1 - Treatment of gain from disposition of natural resource recapture property

 tps://www.law.cornell.edu/cfr/text/26/1.1254-1

You are urged to seek advice based on your particular circumstances from a tax professional  which will help you make the most informed decision.

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