PA-20S/PA-65 Schedule I: 2024 PA Schedule I - Amortization of Intangible Drilling and Development Costs (PA20S/PA-65 I) (2024)
Pennsylvania · Pennsylvania DOR · Used for tax years 2024
PA-20S/PA-65 Schedule I reports Pennsylvania deductions for intangible drilling and development costs for PA S corporations, partnerships and LLCs. It records well information, costs elected to be expensed immediately and amortization deductions.
Who files this form
Pennsylvania S corporations, partnerships and LLCs use Schedule I to report their deduction for intangible drilling and development costs (IDCs). Pennsylvania does not follow the federal election rules for expensing these costs.
What you'll need
Have these forms and records available to complete Schedule I:
- Your PA-20S/PA-65 Information Return, for the entity’s business name and nine-digit federal employer identification number (FEIN).
- Federal Form 1065 or 1120S, Schedule K, line 13d(2) or 12c, for the total IDCs reported on line 3.
- Well records showing each well’s description, address, type, production start date and allocated IDCs. Identify wells outside Pennsylvania.
- For wells created before 2014, information about whether a geophysical survey was completed.
- For wells placed in service before January 1, 2014, the estimated useful life, prior-year accumulated amortization and current Pennsylvania amortization deduction.
- For wells placed in service after December 31, 2013, the elected expense, amortizable amount and accumulated amortization.
Common mistakes
- Do not treat the Pennsylvania expense election as a one-time election. The entity may make it each tax year; partners and shareholders cannot make it.
- If you mark “Yes” on Section II, line 4, you must complete Section III, line 7(d). The elected expense cannot exceed one-third of the IDCs incurred.
- Report the line 5 elected expense on Schedule M, Part II, Section VI, line h. Report the line 8 total amortization on Schedule M, Part II, Section VI, line c.
- Submit additional copies of Schedule I if you need more space to list wells on lines 6 and 7.
Questions people ask
What costs count as intangible drilling and development costs?
These are drilling and development expenses for U.S. wells in which the entity has an operating or working interest. Examples include survey work, ground clearing, drainage, wages, fuel, repairs and supplies needed to drill and prepare wells for oil and gas production. The entity can elect to deduct only costs of items with no salvage value.
How much can the entity elect to expense immediately?
The entity may elect each tax year to expense up to one-third of its IDCs. Because the expense election can vary by well, the amount on line 5 may not equal one-third of the entity’s total IDCs.
Which wells belong on lines 6 and 7?
Use line 6 for wells placed in service before January 1, 2014. Use line 7 for wells placed in service after December 31, 2013.
How is current-year amortization calculated on line 7?
Subtract the elected expense on line 7(d) from the IDCs on line 7(c) to get the amortizable amount on line 7(e). Divide line 7(e) by 10 to calculate line 7(g), amortization for this year. Accumulated amortization on line 7(f) is zero in the year the well is placed in service.