Question

Which statement is TRUE regarding oil drilling programs? A. These programs incur intangible drilling costs which are 100% deductible in the year the drilling takes place. B. These programs incur intangible drilling costs which are deductible over a 27 1/2 year period. C. These programs give an immediate deduction for intangible drilling costs.D. These programs provide an intangible drilling costs deduction over the expected life of the well.

Answer 1

Answer Choices:

1. A and C
2. A and D
3. B and C
4. B and D

Answer:

1. A and C

These programs incur intangible drilling costs which are 100% deductible in the year the drilling takes place.

These programs give an immediate deduction for intangible drilling costs.