jasdlm Posted April 6, 2011 Report Share Posted April 6, 2011 Client paid $4,500 for a 1/32nd working interest and rights to .8125 oil production after royalties. Company drilled the well and it was a dry hole. Client wants to write off the entire $4,500 as a 'sunk cost'. I haven't seen a k1 or any other tax document. He did give me a copy of the contract where he invested the $4,500. Can I write this off? If so, how? I have tried to research this and also asked 2 CPAs in the building, but we must all be really tired, because I stil have no answer. Thanks. Quote Link to comment Share on other sites More sharing options...
grandmabee Posted April 6, 2011 Report Share Posted April 6, 2011 is he a limited partner? what does the contract say. I see alot of these as K-1 Quote Link to comment Share on other sites More sharing options...
jasdlm Posted April 6, 2011 Author Report Share Posted April 6, 2011 The contract just says he has a 1/32nd working interest. Quote Link to comment Share on other sites More sharing options...
Lion EA Posted April 6, 2011 Report Share Posted April 6, 2011 If he still owns the 1/32nd working interest, then he doesn't have a realized loss. Quote Link to comment Share on other sites More sharing options...
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