Interactive Tools
Intangible Drilling Cost Program
Free calculator to estimate your potential first-year tax deductions from Intangible Drilling Cost (IDC) oil and gas programs, based on your investment amount and marginal tax rate.
IDC Investment Details
Estimate how much you could save in taxes in the first year of an IDC investment.
Your IDC Investment Breakdown
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Total Investment
First-Year Tax Savings Estimate
IDC Deduction Amount
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Federal Tax Savings
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State Tax Savings
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Total First-Year Tax Savings
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Net Cost After Tax Savings
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Effective Cost per Dollar
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Alternative Minimum Tax (AMT) Warning
High IDC deductions may trigger the Alternative Minimum Tax. IDC expenses in excess of 65% of net oil and gas income are a preference item for AMT purposes. Consult your tax advisor to evaluate your AMT exposure before investing.
Disclaimer: This estimator provides simplified calculations for illustrative purposes only. Actual tax savings depend on your complete tax situation, including AMT exposure, passive activity rules, and at-risk limitations. IDC investments involve substantial risk including potential loss of principal. Past performance does not guarantee future results. Consult your tax advisor.
Interested in IDC Programs?
Let's discuss how IDC investments may fit into your overall tax strategy.
Frequently Asked Questions
Common Questions
What are intangible drilling costs (IDCs)?
IDCs are the non-salvageable expenses of drilling an oil or gas well — labor, fuel, drilling fluids, and site preparation. The U.S. tax code lets investors in qualifying programs deduct a large share of these costs, often in the first year.
How much of an IDC investment is typically deductible in year one?
A significant portion of an investment in a qualifying program is commonly attributable to intangible drilling costs and may be deductible in the first year, with the remainder depreciated over time. Actual percentages vary by program and must be confirmed with your tax advisor.
Who can invest in IDC programs?
Oil and gas drilling partnerships are private placements generally limited to accredited investors. They are speculative and illiquid, involve commodity-price and drilling risk, and can result in loss of principal. This tool provides an estimate only, not tax advice.