It should come as no surprise that investment oil is one of the most lucrative financial opportunities around. Seasoned and beginner investors alike are always on the hunt for growing investment prospects that they can pounce on; preferably the kind of investments that will continue to show significant growth over the next few years. Oil investment companies, it would seem, are growing exponentially in terms of their success rate. Having a finger in this particular pie is certainly worth it.
The Major Tax Benefits of Oil Gas Investing
Intangible Drilling Costs (IDC) are probably the most advantageous aspect of investing in American gas and oil companies. Essentially, for every dollar of the investment amount that is spent on IDC, investors will receive back the same amount in their tax break at the end of the year.
On average, around 85% of the investment is made up of IDC.So on an investment of $100 000, investors will gain back $85 000 in taxes. It does not take a mathematical genius to figure out the positive news in that equation.
Other Reasons to Consider Oil Investments
Lease costs and completion costs are additional tax benefits that not everyone may be aware of. The costs of equipment leases, mineral rights, and similar administration costs are fully deductible at the end of the tax year. Similarly, completion costs of up to $17 000 are also fully deductible, provided that the correct paperwork is completed within the given time frame.
In addition to this, opportunities in the growing local market are bound to increase as well. More job openings indicate even more exciting growth within the industry itself. As always, an increase in job opportunities marks an equal increase in viable investment opportunities.
American Independence on Foreign Oil
Recent predictions by the federal government indicate that the expected rise in American oil production over the next few years will be impressive. By 2016, there should be about 9.5 million barrels turned out per day. This significant hike is great news for anyone hoping to invest in American oil companies. Naturally, the more a particular company grows, the happier stock holders will be.
The time to invest is now, simply because these companies will grow from strength to strength until around 2020. With a lucrative investment period that will stretch from now until then, this is an unmistakable opportunity to build up a veritable nest egg.