Working interest oil well

[jasdlm]

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.

[grandmabee]

is he a limited partner? what does the contract say. I see alot of these as K-1

[jasdlm]

The contract just says he has a 1/32nd working interest.

[Lion EA]

If he still owns the 1/32nd working interest, then he doesn't have a realized loss.