Intangible drilling costs - IDC

Costs to develop an oil well or gas for the elements that are not part of the final work well. Costs of intangible (IDC) including all expenses incurred by an incidental operator required the drilling and preparation of wells for oil and gas production, as the survey work, land clearing, drainage, wages, fuel, repairs, supplies and so on. In general, expenses are classified as IDC if they have no salvage value. Since IDC include all real and actual expenses, except for the drilling equipment, the word "immaterial" is something of a misnomer.

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The IDC deduction was authorized in the United States since 1913 in order to attract investment capital for business at high risk for oil and gas exploration. If a taxpayer makes an election to IDC expenses, it shall be deducted the amount of the IDC in the tax period in which it was paid or incurred.