Tax Deductible investments

Tax Advantages

Tax Breaks for Investors

Active Vs. Passive Income

The tax code specifies that a working interest (as opposed to a royalty interest) in an oil and gas well is not considered to be a passive activity. This means that all net losses are active income incurred in conjunction with well-head production and can be offset against other forms of income such as wages, interest and capital gains.

Financial Advantages

Depletion Allowances

The IRS also gives a 15% depletion allowance against production revenue to allow for the drop in oil and gas reserves in a well. The 1990 Tax Act allows certain entities to exempt 15% of their gross income from federal taxes to help support smaller oil companies and direct investors.

Investing in oil

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Financial Tools

Investment Calculators

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