Thank you for your answer. I am still a little bit confused. I was told that I would be able to deduct the full amount of my investment, most of which would be deductible for the year that the investment was made.
Although this is not where I got my original explanation, this site seems to be saying the same thing I was told: http://www.investopedia.com/articles/07/oil-tax-break.asp#axzz1l59KMrxQ
For example, if you read in the "Intangible Drilling Costs" section, it says "These expenses generally constitute 65-80% of the total cost of drilling a well and are 100% deductible in the year incurred. For example, if it costs $300,000 to drill a well, and if it was determined that 75% of that cost would be considered intangible, the investor would receive a current deduction
of $225,000." A similar thing is said for the tangible costs, with the difference being that they "must be depreciated over seven years."
The same basic answer is given here: http://postamericana.wordpress.com/2011/10/30/tax-advantages
Can you help clear that up at all for me? It sounds like you may be saying something different than what they are saying (and what I was told when I invested).
Also, since my question was specifically about how to report it in TurboTax, any help you could give there would be great.