Investing in various oil and gas opportunities offered by some of the most reputable and reliable oil and gas companies is an excellent way of beating the stock market nowadays. However, in order to make the most out of your investments, you will have to work with the best companies, ones that are perfectly knowledgeable of the risks as well as the advantages of drilling for oil and gas.
Now, while you will have no issues finding such a company, you might find yourself hesitant to invest in the first place, mainly due to the risks involved. However, you should know that today, there are plenty of incentives for those that opt to invest in a variety of projects, such as the Alpha Seven Energy – Oil Investing Blueprint. If you are not familiar with these incentives, you should keep reading this article, as we will cover them in greater detail.
For starters, you should know that the government offers small producers as well as oil and gas investors some of the best and most attractive incentives available in the tax code. These incentives are pretty much unmatched in any other field or industry. Therefore, if you are planning to invest yourself, know that this is the best time to do it.
To encourage investors and small oil and gas producers, the government and the financial sector have introduced a new type of credit, which is based on the percentage depletion allowance. This credit is based on the deduction, which can be used only by those that possess domestic gas and oil holdings. This deduction allows for up to 15% of all the gross income from gas and oil wells to not be included in taxation. With it, investors and small oil and gas producers can claim this deduction for as long as their projects and wells are generating any income.
Aside from the special credits, you should also know that there is also the benefit of tangible drilling cost reductions as well. According to these, the full amount of dollars invested in the drilling equipment is 100% tax deductible. This amount can be deducted as depreciation within a time period of 7 years.
Keep in mind that these drilling costs cover everything on a project, with the exception of actual drilling equipment, which includes supplies, labor, as well as other drilling items. These are actually considered intangible. These costs deductions, which make up almost 80% of the total drilling costs, can be taken at 100% deduction too. However, that can be done only within the year they incurred.
The lease costs
Another benefit of investing in oil and gas projects involves the lease costs. These include all kinds of legal expenses, sales expenses, Lease operating costs, administrative accounting, and purchase of minerals. Through cost depletion, these are 100% deductible as well.
This type of protection implies that oil and gas investments are not only a great strategy for ensuring long-term investing security but also a reliable safety coverage for long-term financial stability.
In the end, keep in mind that these incentives are not some loopholes in the law. On the contrary, they were intentionally placed by the government, with the aim of boosting the oil and gas production and making it easier for investors to seek tax relief.