Although our tax rules deny a tax write-off for lost profits, many other types of losses encountered by the average drilling contractor or equipment business can be eased or eliminated -- simply by taking advantage of those tax regulations.
Under the tax rules, any loss sustained during the taxable year, a loss not covered or "made good" by insurance, can be claimed as a tax deduction. However, for a loss to be deducted, it must be evidenced by a "closed and completed transaction."