OIL AND GAS INVESTING OPPORTUNITIES WITH CEFM
ABOUT US!
C EFM as Managing G eneral Partner creates and administers L imited Partnerships for investments into oil and gas opportunities. We provide an exclusive niche investment opportunity for Accredited Investors, Venture Capitalists, Institutional Investors, Family O ffices and other qualified entities.
OIL AND GAS TAX DEDUCTIONS- TAX SHELTERS FOR HIGH INCOME EARNERS
The greatest benefit of the generous tax deductions associated with oil and gas investing is the potentially huge increase in realized profits. A top-margin Accredited Investor could see his COGJV after-tax annual yields through payback increase by up to 76.8% once tax avoidance credits are factored in! Including the new 20% Qualified Business Income (QBI) for passthrough income that starts in tax year 2018.
SIMPLIFIED EXAMPLE OF 1ST-YEAR
TAX DEDUCTION FOR OIL & GAS
TAX CONSIDERATIONS OF OIL & GAS INVESTING – THE BASICS
CONGRESSIONAL INCENTIVES
INTANGIBLE DRILLING COST (IDC) TAX DEDUCTION
DEPRECIATION TAX DEDUCTION
SMALL PRODUCER’S TAX EXEMPTION- DEPLETION ALLOWANCE
ACTIVE, OR NON-PASSIVE VS. PASSIVE INCOME
ALTERNATIVE MINIMUM TAX (AMT)
Tax Benefits for the Small Producer
In the case of a successful oil and gas investment, the IRS allows for a tax write-off from one’s taxable earned income of approximately 65% – 80% of the investment amount in the year of investment. The remaining amount of the investment is depreciated over a period of seven years.
Even in the case of an unsuccessful oil and gas investment, the IRS allows almost 100% of the investment to be written off against one’s taxable earned income unlike stock investments where the investor may only writeoff a small portion of the loss (subject to certain limitations).
The IRS currently allows 15% of one’s gross Working Interest income from the sale of oil and/or gas to be derived “tax free” (this is referred to as a “depletion allowance”).
TAX CONSIDERATIONS – SMALL
PRODUCER’S PERSPECTIVE
CEFM’S PRACTICE CONCERNING PARTNER’S K-1S
CEFM as Managing General Partner has always made it a practice to distribute the Partner’s K-1s and supporting documentation usually by mid-February. We have found that this provides enough time for the partner to process the information and file his/her tax return by April 15.
Distributed Well Revenue & Depletion Allowance
1st Year IDC & Depreciation Deductions
Business Capital Activities Worksheet
