If the taxpayer elects to capitalize and to amortize intangible drilling costs over a 3-year period for regular income tax purposes, there is no adjustment or preference for AMT purposes.

Question

Quizplus · Accepted Answer

Intangible drilling costs must be capitalized and amortized over a longer period of time (typically 60 months) for AMT purposes. Therefore, there will be an adjustment or preference for AMT purposes if the taxpayer elects to amortize over only a 3-year period for regular income tax purposes.

If the Taxpayer Elects to Capitalize and to Amortize Intangible