While making an investment decision requires a lot of preplanning and research, with the current economy as it is an investment in oil or gas production may very well be worthwhile for a midsize or large corporation and wealthy single investors to consider. By investing in American based oil wells, you are not only helping to create jobs for residents, you are also helping the country gain its own fuel independence. According to the US Energy Information Administration, in 2013 more than 1 billion barrels of oil came from Canada and 485 million barrels came from Saudi Arabia. Our general demand for oil within the USA is high however we only import about 40% of our needs from other countries. More than 60% is produced right here on American soil which means oil wells are in fact very successful within our own borders and can be a very lucrative investment for the right corporations.
Are there any tax advantages?
Yes! Several in fact, oil and gas investments are some of the most advantageous available when it comes to tax benefits. If held through a partnership, the income from your well is not usually considered as income from a passive activity. Intangible costs include labor, chemicals, grease and numerous other items necessary for drilling a well. These usually make up about 65% or more of the total cost of drilling and are 100% deductible the same or following year. The term known as the “depletion allowance” allows for 15% of all gross income to be excluded from taxation, though it is limited to smaller oil production outfits.
Is it worth investing in oil?
In short, it can be, yes. Some of the largest and most well-known industries in the world are oil and gas companies. As with any investment, be it on Wall Street or the wide open spaces of Texas or Montana, there are risks – however with an educated purchase of an oil well you are not just buying a stock as you would within an oil company, you are gaining direct ownership of the asset and will be able to participate in decisions regarding your well. Once you have made the initial investment into your well, you can start receiving revenue in as little as 100 days after it goes into production. It’s a unique and fun opportunity that not only provides you with a current income but can also help grow America’s energy independence.
Want to learn more about how to buy oil wells and invest properly within the industry? Look no further than Oil Boom USA for relevant and up-to-date information!
