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How to resolve Lacerte diagnostic ref. 2000184

SOLVEDby IntuitLacerte Tax4Updated September 23, 2021

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)

  1. Go to Screen 46 Elections.
  2. Select Election 1 from the left-side menu.
  3. Scroll down to Election to Expense IDC for Nonproductive Wells Section.
  4. Place a checkmark in the box Expense intangible drilling & development costs [263(c)].
  5. Enter a Description of well and Total costs incurred to complete the statement.
  1. Go to Screen 38 Elections.
  2. Select Election 1 from the left-side menu.
  3. Scroll down to Election to Expense IDC for Nonproductive Wells Section.
  4. Place a checkmark in the box Expense intangible drilling & development costs [263(c)].
  5. Enter a Description of well and Total costs incurred to complete the statement.
  1. Go to Screen 41 Elections.
  2. Select Election 1 from the left-side menu.
  3. Scroll down to Election to Expense IDC for Nonproductive Wells Section.
  4. Place a checkmark in the box Expense intangible drilling & development costs [263(c)].
  5. Enter a Description of well and Total costs incurred to complete the statement.
  1. Go to Screen 33 Elections.
  2. Select Election 1 from the left-side menu.
  3. Scroll down to Election to Expense IDC for Nonproductive Wells Section.
  4. Place a checkmark in the box Expense intangible drilling & development costs [263(c)].
  5. Enter a Description of well and Total costs incurred to complete the statement.
  1. Go to Screen 50 Elections.
  2. Select Bene Election 1 from the left-side menu.
  3. Scroll down to Election to Expense IDC for Nonproductive Wells Section.
  4. Place a checkmark in the box Expense intangible drilling & development costs [263(c)].
  5. Enter a Description of well and Total costs incurred to complete the statement.

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