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2014

Pennsylvania Department of Revenue

Instructions for PA-20S/PA-65 Schedule I

Amortization of Intangible Drilling Costs

production of oil and gas, such as sur-

GENERAL INFORMATION

LINE 6(a)

vey work, ground clearing, drainage,

wages, fuel, repairs and supplies. You

PURPOSE OF SCHEDULE

Description of Well

can elect to deduct only the costs of

Use PA-20S/PA-65 Schedule I to report

Enter the location of each well or the

items with no salvage value.

the PA S corporations, partnerships or

name of each well. Description of the

LLC’s current year deduction of intangi-

well should be same as the description

PART B

ble drilling costs (IDCs). Pennsylvania

the entity uses for record keeping.

does not follow federal election rules for

currently expensing intangible drilling

LINE 6(b)

LINE 4

costs.

Date well placed in service

This is not a one-time election. A PA S

LINE INSTRUCTIONS

Enter the date that the well was placed

corporation, partnership or LLC may

into production.

elect each tax year to expense up to

PART A

one-third of the intangible drilling costs

that the entity incurs. The PA S corpo-

LINE 6(c)

ration, partnership or LLC incurring the

LINE 1

Intangible Drilling Cost Expense

drilling cost makes the election to ex-

Enter the total amount of the intangible

For wells created prior to 2014, indicate

pense the intangible drilling costs for

drilling costs allocated to each well.

whether or not the PA S corporation,

Pennsylvania personal income tax pur-

partnership or LLC had a Geophysical

poses. Its partners or shareholders

Survey

completed.

Geophysical

LINE 6(d)

cannot make the election. If Line 4,

Surveys are a systematic collection of

Part B is marked “Yes”, then Line 7(d)

geophysical data for spatial studies,

Life of well

of Part C must be completed.

collecting data from above or below the

Enter the estimated useful life of

Earth’s surfaces.

the well. Prior to January 1, 2014,

LINE 5

Pennsylvania required the intangible

LINE 2

drilling costs to be amortized over the

Indicate the amount of intangible

estimated useful life of each well.

The Pennsylvania Tax Reform Code of

drilling costs that the S Corporation,

1971, unlike the Internal Revenue Code

partnership or LLC is electing to imme-

LINE 6(e)

§263(c), does not contain a provision

diately expense in the current tax year.

that allows for current expensing of

Since each well can elect to immedi-

Accumulated Amortization

capital expenditures. These include in-

ately expense up to one third of intan-

tangible drilling and development costs

Enter the cumulative amount of intan-

gible drilling costs, the amount listed

associated with oil and gas wells or

gible drilling costs amortized in prior

here may not equal one-third of the

wells drilled for geothermal deposit.

years.

entity’s total intangible drilling costs.

Check yes if the entity expensed on the

Federal return.

The total amount reported on Line 5,

LINE 6(f)

Part B should be reported on Schedule

M, Section F, Line H of Part B.

LINE 3

PA Deduction of IDCs

Enter the amortization expense that will

Enter the total amount of intangible

be deducted for Pennsylvania personal

PART C

drilling and development costs that the

income tax purposes during the current

entity incurred during the current tax

tax year.

Well Description

year. These costs represent drilling and

development expenses for wells in the

LINE 6

LINE 7

United States where the entity has an

operating or working interest. These

Complete chart for well(s) placed in

expenses include costs necessary in the

Complete chart for well(s) placed in

drilling and preparation of wells for the

service prior to 1/1/2014.

service after 12/31/2013.

Instructions For Pa-20s/pa-65 Schedule I - Amortization Of Intangible Drilling Costs - 2014

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