Sauer Oil Corporation, an integrated producer incurs IDC costs in the following years as indicated. The IDC amounts marked with an asterisk (*) relate to dry-hole IDC.

Date incurred/amount

3/12/20xa / 200,000

7/18/20xa / 300,000*

4/10/20xb/ 280,000*

11/2/20xb / 320,000*

2/1/20xc / 600,000

12/2/20xc / 150,000

3/4/20xd / 240,000

9/14/20xd / 180,000* +

Required:

Compute the amount that may be deducted for Idc in the years 20xa, 20xb, 20xc, and 20xd.

Answer rating: 100% (QA)

IDC cost is the Intangible Drilling Costs that include all expenses ... View the full answer