Question

Dry hole oil well

Forum|Forum|2 years ago
February 17, 2024
1 reply
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As an individual, I invested in a small working interest of an oil well. The money was for drilling costs & expenses. It turned out to be a dry hole. I was told that I could deduct the costs from my taxes. If that is correct, where do I enter that expense in Turbo Tax?

TurboTax Home & Biz Windows

PatriciaV

A working interest in an oil well would be reported on a Schedule C for the gross receipts, expenses and depletion. Expenses include overhead, dry hole costs, legal and administrative, taxes, and other operating expenses. If you received no income, you can't deduct depletion.

Go to Schedule C in TurboTax using the Search box in the upper right corner of the screen and clicking on "jump to Schedule C." Follow the interview to set up your working interest and report your dry hole costs.

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