Useful Information & Reference Sources
Tax Benefits to Oil & Gas Investments
Taxes created by income received from distributions from IRAs and 401k can be offset by reinvestment in Oil and Gas Partnerships with the use of IDC (Intangible Drilling Costs). The IDC passed through to the investor could substantially reduce any tax created by the distribution.
As an example, a $50,000 distribution at the top rate of 39.6% may create a $19,800 tax liability. By investing the distribution into an oil and gas partnership, the taxable income could be reduced by approximately $42,500, leaving a tax liability of only $2,970 effectively saving $16,830 in taxes. The investor also has the benefit of acquiring a potential income producing property. See helpful articles below for more information.
Retirees who forget annual 401(k) and IRA withdrawals face huge penalties.
IRS Circular 230 Disclosure: To ensure compliance with Treasury Department regulations, we inform you that any tax advice that may be contained in this communication is not written or intended to be used, and cannot be used, by the recipient or any other taxpayer for the purpose of (i) avoiding federal tax penalties or (ii) promoting, marketing, or recommending to another party any tax related matters addressed herein. The federal income tax advice contained herein was written to support the promotion or marketing of the transaction or matter addressed by such written advice. Each prospective investor should seek advice based on the taxpayer’s particular circumstance from an independent tax advisor.
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