Oil and Gas Tax Advantages

Oil and natural gas ventures are one of the best tax advantaged investments available. Different states offer different tax exemptions into this venture. They offer these incentives to promote domestic drilling of oil and natural gas.

Small producer exemptions, also known as percentage depletion allowance. This incentive allows for a percentage of the gross income from oil and gas producing property to be tax free. Texas for instance offers 15% as small producer exemptions.
Tangible drilling costs are yet another form of tax deductions that some states offer in this investment. Most governments encompass this to include the actual direct costs of drilling equipment, deductible after a given number of years. Some states set the number of years  meaning that at the end of set number of years, the costs of these equipment (s) are 100% tax exempted.
Lease costs are also deductible in the year that they are incurred. These costs could include accounting expenses, lease operating costs, purchase of lease and mineral rights and so on. They cover the day to day operations of the well, and as well, the costs of re-entry or re-work of an existing producing well.

Energy Equity Group is a trusted source for reliable and verifiable investment opportunities in American independent energy companies. To learn more about the tax advantages in investing in energy please get our FREE investors guide.

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