tax guidance from my cpa in reference to iron horse and the fof model
PDF · 13 Nov 2025
A CPA-prepared Q&A memo (created Nov 13, 2025) explaining how Intangible Drilling Cost (IDC) deductions flow through an oil & gas limited partnership to individual investors, what entity structures (living trusts, disregarded LLCs, multi-member LLCs) mean for the ability to offset active income, how IDC expensing reduces investor basis (example: $100K investment with 85% IDC reduces basis to $15K), and timing rules for deducting IDCs (spudding/drilling by March 31 next year generally allows deduction in prior tax year).
Questions this document answers
November 13, 2025