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Tax Benifits.

American investors enjoy great tax benefits from oil investment.

Congress has enacted tax laws to encourage domestic development of oil and gas.

These tax benefits for oil and gas investing were set in place to attract private funding and stimulate investment in domestic oil exploration, and in turn build our nation as one that is more self-sufficient in energy production. The benefit of tax-free income and heavy deductions makes this opportunity with Homeland Energy, GP one of the best tax-advantaged investments.

The tax benefit to investing with Homeland Energy, GP is 100%

of your dollars invested in the exploration and drilling of oil is tax deductible. Further, 15% of income derived from oil production is tax-deductible.

IRS Published Tax Laws:

Intangible Drilling Cost Tax Deduction:
The intangible expenditures of drilling (labor, chemicals, mud, grease, etc.) are usually about 65% to 80% of the cost of a well. These expenditures are considered to be an “intangible drilling cost (IDC )” which is 100% deductible during the first year. For example, a $100,000 investment would yield up to $75,000 in tax deductions during the first year of the venture. These deductions are available in the year the money was invested, even if the well does not start drilling until March 31st of the year following the contribution of capital. (See Section 263 of the tax code.)
Tangible Drilling Cost Tax Deduction:
The total amount of the investment allocated to the equipment, the “Tangible Drilling Cost (TDC),” is 100% tax deductible. In the example above, the remaining tangible cost ($25,000) may be deducted as depreciation over a seven-year period. (See Section 263 of the tax code)
Small Producer Tax Exception:
The 1990 Tax Act provided some special tax advantages for small companies and individuals. This tax incentive, known as the “ Percentage Depletion Allowance,” is specifically intended to encourage participation in oil and gas drilling. This tax benefit is not available to large oil companies, retail petroleum marketers, or refiners that produce more than 50,000 barrels a day. It is also not available for entities owning more than 10,000 barrels of oil average daily production. The Small Producers Exemption allows 15% of the Gross Income (not net income) from Oil and Gas producing properties to be tax-free.

 

It is advised that a you seek advice from your local tax accountant for applicable tax laws.

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