Intangible Drilling Costs 1
Intangible Drilling Costs 1 : Expenditures made by an operator for labor, fuel, repairs, hauling and supplies used in drilling and completing a well for production. Intangible drilling costs include the construction of derricks, tanks, pipelines on the lease, the buildings and preparation of the drill site but do not include the cost of materials or equipment. A rule of thumb is: do the items for which expenditure were made have any salvage value? If not, they qualify under the tax laws as intangible drilling costs
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