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How to resolve ProConnect Tax diagnostic ref. 2000184

by Intuit• Updated 1 year ago

This article will help you resolve the following diagnostic, electing to expense intangible drilling and development (IDC) for nonproductive wells:

"Oil and Gas property #X: Dry hole expenses of $XX have been entered. For this amount to be allowed as a deduction, the nonproductive well must have been completed in the current tax year and an election must be attached to the return." (Ref #2000184)

To add an election in the Individual module

Go to Input Return ⮕ Other ⮕ Elections.
Select the Other tab.
Scroll down to Election to Expense IDC for Nonproductive Wells Section.
Place a checkmark in the box Expense intangible drilling & development costs [263(c)].
Enter a Description of well and Total costs incurred to complete the statement.

To add an election in the S-Corp module

Go to Input Return ⮕ Other ⮕ Elections.
Select Elections in the upper right corner.
Select the Other tab.
Scroll down to Election to Expense IDC for Nonproductive Wells Section.
Place a checkmark in the box Expense intangible drilling & development costs [263(c)].
Enter a Description of well and Total costs incurred to complete the statement.

To add an election in the Corporate module

Go to Input Return ⮕ Other ⮕ Elections.
Select Elections in the upper right corner.
Select the Other tab.
Scroll down to Election to Expense IDC for Nonproductive Wells Section.
Place a checkmark in the box Expense intangible drilling & development costs [263(c)].
Enter a Description of well and Total costs incurred to complete the statement.

To add an election in the Partnership module

Go to Input Return ⮕ Other ⮕ Elections.
Select Elections in the upper right corner.
Select the Other tab.
Scroll down to Election to Expense IDC for Nonproductive Wells Section.
Place a checkmark in the box Expense intangible drilling & development costs [263(c)].
Enter a Description of well and Total costs incurred to complete the statement.

To add an election in the Fiduciary module

Go to Input Return ⮕ Other ⮕ Elections.
Select Bene. Elections in the upper right corner.
Select the Other tab.
Scroll down to Election to Expense IDC for Nonproductive Wells Section.
Place a checkmark in the box Expense intangible drilling & development costs [263(c)].
Enter a Description of well and Total costs incurred to complete the statement.

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