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Tax Advantages of Oil & Gas Investments. Narrator: Dan Griffin. IRS Tax Code References. IRS Publication 535. IRS Tax Code References. IRS Publication 535 Tax Analysis Worksheet. IRS Tax Code References. IRS Publication 535 Tax Analysis Worksheet
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Tax Advantages of Oil & Gas Investments Narrator: Dan Griffin
IRS Tax Code References • IRS Publication 535
IRS Tax Code References • IRS Publication 535 • Tax Analysis Worksheet
IRS Tax Code References • IRS Publication 535 • Tax Analysis Worksheet • http://www.redrockenergy.com/taxConsiderations.asp • http://www.irs.gov/publications/p535/ch07.html#d0e4645
Intangible Drilling Costs • Any cost that cannot be resold later!
Intangible Drilling Costs Such as….. • Drilling rig rentals
Intangible Drilling Costs Such as….. • Drilling rig rentals • Cement
Intangible Drilling Costs Such as….. • Drilling rig rentals • Cement • Drilling Consultants
Intangible Drilling Costs Such as….. • Drilling rig rentals • Cement • Drilling Consultants • Casing pipe
Intangible Drilling Costs Such as….. • Drilling rig rentals • Cement • Drilling Consultants • Casing pipe • Stimulating, frac’ing, and acidizing
Intangible Drilling Costs Such as….. • Drilling rig rentals • Cement • Drilling Consultants • Casing pipe • Stimulating, frac’ing, and acidizing • Mud logs
Intangible Drilling Costs • Drilling rig rentals • Cement • Drilling Consultants • Casing pipe • Stimulating, frac’ing, and acidizing • Mud logs • Geologists
Intangible Drilling Costs • Any cost that cannot be resold later! • Basically ALL the costs of drilling the well is 100% deductible off your current year taxes. • Even if the investment is made on Dec. 31st! • Example: • An individual investing $100,000 dollars in a drilling program would be able to deduct approx. $80,000 immediately because of the IDC.
Tangible Drilling Costs • Any capital expenditure or asset that could be resold later!
Tangible Drilling Costs Such as..... • Well head
Tangible Drilling Costs Such as..... • Well head • Tanks
Tangible Drilling Costs Such as..... • Well head • Tanks • Separator
Tangible Drilling Costs Such as..... • Well head • Tanks • Separator • Line Heater
Tangible Drilling Costs Such as..... • Well head • Tanks • Separator • Line Heater • Leasehold interest
Tangible Drilling Costs • Any capital expenditure or asset that could be resold later! • Tangible Drilling Costs are depreciated according to standard depreciation rules. • 20% for the first year • Example: • An individual investing $100,000 dollars in a drilling program would be able to depreciate approx. $20,000 for the TDC with your 1st year write off of $4,000.
Investment Comparison *Does not encompass all possible investment strategies and is used solely to provide a generic comparison between stocks, real estate and oil & gas investments. Investors should consult with their accountants and investment advisors for specific advice for their particular situation.
Investment Comparison *Does not encompass all possible investment strategies and is used solely to provide a generic comparison between stocks, real estate and oil & gas investments. Investors should consult with their accountants and investment advisors for specific advice for their particular situation.
