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Would the intangible drilling cost deduction associated with an oil well investment be used to offset the tax charges to convert a traditional IRA to a Roth IRA?


The BIDaWIZ Team's Answer:

Yes, you can use the intangible drilling cost (IDC) as a reduction to the Roth IRA conversion tax liability. The cost treated as an expense is not subject to passive activity loss rules as it is an interest in an oil and gas well.
References: Internal Revenue Code Section 469(c)(3)(a) & IRS Publication 925

The BIDaWIZ Team



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