7869 / If the limited partnership elects to expense intangible drilling costs, how does a limited partner treat allocated shares of such costs?

Election to Amortize Costs

If the limited partner makes this election, the limited partner may deduct each year on his or her income tax return a ratable portion of the allocated share of intangible drilling costs over the 60-month period beginning with the month in which such amounts were expended by the partnership.²

If a limited partner elects to amortize intangible drilling costs over the 60-month period, any amount of intangible drilling and development costs covered by the election will not be treated as an item of tax preference for purposes of the alternative minimum tax.³ See Q 7887.