You’ve got it mostly right. As a GP in a non-integrated oil & gas venture, your IDC deduction generally isn’t an AMT add-back—that exception is in §57(a)(2)(E). The catch is the 40% limitation: you can only reduce AMTI by up to 40% of your pre-IDC AMTI. In practice, this means you usually keep the bulk of the IDC deduction, but if the IDC is very large relative to your income, some gets added back for AMT.
TurboTax can handle the math, but it often misclassifies O&G losses as passive or doesn’t flow the exception properly. If you go this route, you’ll likely need the desktop version in forms mode (not the online one) or a CPA who’s comfortable with oil & gas K-1s.
So yes, the IDC deduction still works really well even under AMT - you just need to be aware of the 40% cap and make sure the software is set up correctly.
