Direct Oil and Gas Investing offers powerful tax deductions to investors. Up to 80% of the investment can be deducted in the year the investment is made as long as you use the proper investment strategy
Current Tax Planning Techniques in U.S. and International TransactionsWinston & Strawn LLP
The Real Deal webinar, “Current Tax Planning Techniques in U.S. & International Transactions,” focused on the tax issues relating to both domestic and cross-border transactions. In the domestic area, we reviewed structuring and other common tax issues in the acquisition of domestic C corporations, S corporations, and partnerships. In the international area, we covered structuring issues relating to acquisitions of foreign targets by U.S. corporations, as well as current developments related to inversions in light of IRS Notice 2014-52 and new IRS Notice 2015-79.
EIS & SEIS Relief Workshop - Plus Accounting, Chartered AccountantsVictoria King
Plus Accounting held a Workshop at Myhotel in Brighton in March 2014 about the EIS and SEIS Reliefs.
Find out here how they could benefit you and your business.
California Incentives and Multi-State Tax Issues webinar slidesRoger Royse
An online discussion of various state tax issues for companies and individuals doing business in California. Our panelists cover recent developments in California income and sales tax, tax credits and incentives, multi-state tax issues for technology companies and state residency planning for individuals. Our panel of speakers includes:
Roger Royse, Royse Law Firm
Monika Miles, Miles Consulting Group
David Wittrock, Price, Wittrock CPA LLP
David Spence, Royse Law Firm
How to Form an Angel or Venture Fund: Legal, Business and Tax Strategiesideatoipo
While large amounts of pooled capital continue to be invested in startups, the legal, tax and regulatory environment continues to evolve. Many entrepreneurs and investors pool their capital into vehicles designed to invest in startups. Others form funds to manage investments by other passive investors.
Join us as we discuss the complex web of legal, tax and regulatory requirements for forming and operating a fund.
Two Silicon Valley attorneys will discuss the nuts and bolts of forming an angel or venture fund, including:
1) Types of investment funds designed to invest in startups
2) Typical investment fund terms
3) Various ways of structuring the distribution waterfall
3) Special tax rules applicable to fund managers (and some related tax issues on the investors side)
4) The federal and state registration requirements for fund managers;
Securities law issues for funds
5) Special considerations for foreign investors in funds
6) CFIUS considerations for funds with foreign investors
and more!
This workshop helps attendees understand the income taxation of trusts and estates, identify sources of taxable income, calculate distributable net income, and apply the Alternative Minimum Tax.
Presenter: David Spence, Jennifer Han, Allison Kroeker, and Li (Fiona) Xu of Royse Law Firm
Current Tax Planning Techniques in U.S. and International TransactionsWinston & Strawn LLP
The Real Deal webinar, “Current Tax Planning Techniques in U.S. & International Transactions,” focused on the tax issues relating to both domestic and cross-border transactions. In the domestic area, we reviewed structuring and other common tax issues in the acquisition of domestic C corporations, S corporations, and partnerships. In the international area, we covered structuring issues relating to acquisitions of foreign targets by U.S. corporations, as well as current developments related to inversions in light of IRS Notice 2014-52 and new IRS Notice 2015-79.
EIS & SEIS Relief Workshop - Plus Accounting, Chartered AccountantsVictoria King
Plus Accounting held a Workshop at Myhotel in Brighton in March 2014 about the EIS and SEIS Reliefs.
Find out here how they could benefit you and your business.
California Incentives and Multi-State Tax Issues webinar slidesRoger Royse
An online discussion of various state tax issues for companies and individuals doing business in California. Our panelists cover recent developments in California income and sales tax, tax credits and incentives, multi-state tax issues for technology companies and state residency planning for individuals. Our panel of speakers includes:
Roger Royse, Royse Law Firm
Monika Miles, Miles Consulting Group
David Wittrock, Price, Wittrock CPA LLP
David Spence, Royse Law Firm
How to Form an Angel or Venture Fund: Legal, Business and Tax Strategiesideatoipo
While large amounts of pooled capital continue to be invested in startups, the legal, tax and regulatory environment continues to evolve. Many entrepreneurs and investors pool their capital into vehicles designed to invest in startups. Others form funds to manage investments by other passive investors.
Join us as we discuss the complex web of legal, tax and regulatory requirements for forming and operating a fund.
Two Silicon Valley attorneys will discuss the nuts and bolts of forming an angel or venture fund, including:
1) Types of investment funds designed to invest in startups
2) Typical investment fund terms
3) Various ways of structuring the distribution waterfall
3) Special tax rules applicable to fund managers (and some related tax issues on the investors side)
4) The federal and state registration requirements for fund managers;
Securities law issues for funds
5) Special considerations for foreign investors in funds
6) CFIUS considerations for funds with foreign investors
and more!
This workshop helps attendees understand the income taxation of trusts and estates, identify sources of taxable income, calculate distributable net income, and apply the Alternative Minimum Tax.
Presenter: David Spence, Jennifer Han, Allison Kroeker, and Li (Fiona) Xu of Royse Law Firm
S corporations are legally structured in a way that allow them to go untaxed. This is because income that is recognized by owners is taxed at the personal level and not via the business. Moreover, an S corporation is a pass-through or flow-through entity, which means income passes through to the shareholders. This newsletter details tax management information and methods used by and relevant to S corporations.
How To Relocate An International Startup to Silicon Valleyideatoipo
You began your startup outside of the United States, and now you would like to relocate it to Silicon Valley. Every year many startups make the move without working through the complex legal issues. Failing to address those issues can kill your startup. San Francisco-based startup and venture capital attorney Jason Putnam Gordon of Polsinelli LLP will provide a high-level overview of the common US legal issues surrounding the move. This program will provide information on the following key issues:
· Corporate structure
· Tax consequences
· Intercompany agreements
· Immigration
· Intellectual property issues
· US employment laws
· The Committee on Foreign Investment in the United States, also known as CFIUS
· Export-control Issues
· Common pitfalls and mistakes
· And much, much more.
Final top ten mistakes startups make 09.23.2014 (00046831x c0cb4)Roger Royse
LEARN FROM THE EXPERTS. EXPERIENCED CFO AND ATTORNEY WILL DISCUSS OBVIOUS AND AVOIDABLE MISTAKES COMMONLY MADE BY STARTUPS IN THEIR EARLY YEARS.
Financial and legal mistakes go hand in hand and often overlap. This interactive "conversation" between a CFO and an attorney will shed light upon these common mistakes, as well as provide solutions for avoiding common pitfalls. This webinar is geared towards current and future executives at startups, financial and legal advisors of startups, and students considering starting their own businesses.
Speakers: Lisa Chapman, Esq. - Royse Law Firm
Chris Chillingworth - Partner at CFOs2Go
Moderator: Fred Greguras, Esq. - Royse Law Firm
To help you navigate the changes with your pass-through entity clients, I am sharing a resource to create dialogue for your year-end tax planning with them.
We work together to provide the solutions that help your CPA firm succeed including proactive accountability to keep you moving in the right direction.
If you are ready to join the ranks of successful firms throughout the US who have realized significant benefits as a result of Firm Foundation membership and want to explore the next steps, let’s talk: 800.537.7179
American Incorporators has been helping businesses incorporate for more than 35 years. Here, we break down the pros and cons of the most common business entities: C-Corporations, LLCs and S-Corporations.
According to China Drug Distribution Industry Report, 2012-2015 released by Sino Market Insight, the total sales of Chinese drug distribution industry is estimated to surge 102% over 2011 to RMB1.4288 trillion in 2015.
S corporations are legally structured in a way that allow them to go untaxed. This is because income that is recognized by owners is taxed at the personal level and not via the business. Moreover, an S corporation is a pass-through or flow-through entity, which means income passes through to the shareholders. This newsletter details tax management information and methods used by and relevant to S corporations.
How To Relocate An International Startup to Silicon Valleyideatoipo
You began your startup outside of the United States, and now you would like to relocate it to Silicon Valley. Every year many startups make the move without working through the complex legal issues. Failing to address those issues can kill your startup. San Francisco-based startup and venture capital attorney Jason Putnam Gordon of Polsinelli LLP will provide a high-level overview of the common US legal issues surrounding the move. This program will provide information on the following key issues:
· Corporate structure
· Tax consequences
· Intercompany agreements
· Immigration
· Intellectual property issues
· US employment laws
· The Committee on Foreign Investment in the United States, also known as CFIUS
· Export-control Issues
· Common pitfalls and mistakes
· And much, much more.
Final top ten mistakes startups make 09.23.2014 (00046831x c0cb4)Roger Royse
LEARN FROM THE EXPERTS. EXPERIENCED CFO AND ATTORNEY WILL DISCUSS OBVIOUS AND AVOIDABLE MISTAKES COMMONLY MADE BY STARTUPS IN THEIR EARLY YEARS.
Financial and legal mistakes go hand in hand and often overlap. This interactive "conversation" between a CFO and an attorney will shed light upon these common mistakes, as well as provide solutions for avoiding common pitfalls. This webinar is geared towards current and future executives at startups, financial and legal advisors of startups, and students considering starting their own businesses.
Speakers: Lisa Chapman, Esq. - Royse Law Firm
Chris Chillingworth - Partner at CFOs2Go
Moderator: Fred Greguras, Esq. - Royse Law Firm
To help you navigate the changes with your pass-through entity clients, I am sharing a resource to create dialogue for your year-end tax planning with them.
We work together to provide the solutions that help your CPA firm succeed including proactive accountability to keep you moving in the right direction.
If you are ready to join the ranks of successful firms throughout the US who have realized significant benefits as a result of Firm Foundation membership and want to explore the next steps, let’s talk: 800.537.7179
American Incorporators has been helping businesses incorporate for more than 35 years. Here, we break down the pros and cons of the most common business entities: C-Corporations, LLCs and S-Corporations.
According to China Drug Distribution Industry Report, 2012-2015 released by Sino Market Insight, the total sales of Chinese drug distribution industry is estimated to surge 102% over 2011 to RMB1.4288 trillion in 2015.
Understand the various legal forms of a business and the opportunities and challenges associated with each form
http://frombootstobusiness.com/category/from-boots-to-business/business-legal-principles/
For many business owners, the major source of retirement funding is the sale of their business or assets owned by the business. Fortunately, there are a number of capital gains tax (CGT) concessions available to small business that reduce or even eliminate the capital gain on the disposal of certain assets. It is important to understand the concessions available and the eligibility requirements to ensure entitlements are maximised.
ASCSP Conference 2019 - What Cost Segregation Professionals Need to Know Abou...kaliwhit
What Cost Segregation Professionals Need to Know About Opportunity Zones:
The Tax Cuts and Jobs Act of 2017 created Opportunity Zones (“OZ”) which are specifically designated geographic districts that allow investors to receive hefty tax breaks.
Investors can defer and reduce capital gains taxes on existing investments, and pay no capital gains taxes on new investments by investing in Opportunity Funds.
If an individual, partnership, estate, trust, or an S corporation
engages in an activity that is not conducted as a
for-profit business, expenses (other than cost of goods sold)
are not deductible. This rule does not apply to corporations,
other than S corporations. If an activity is considered
a for-profit business, deductions can exceed income, allowing
the resulting loss to offset other income.
If either party to the acquisition process is a Securities and Exchange Commission (SEC) registrant, incremental information may be required. And for CFOs, it’s not only a matter of what, but when.
Tax Essentials for North Carolina LLC OwnersBen Wann
Navigating the complexities of taxes is a crucial aspect of managing a Limited Liability Company (LLC). This presentation is specifically tailored for LLC owners in North Carolina, providing them with essential information and practical guidance to handle their tax obligations effectively.
CONVERSION OF PARTNERSHIP FIRM INTO LLPANMOL GULATI
-This document contains all the conceptual knowledge about: 1. partnership firm 2. LLP
- suitability/ unsuitability of both form of organisations
- benefits of LLP over firm
- Conversion process
- statutory compliances
Tax Guide to Overseas Real Estate Investments for U.S. InvestorsDurise
Before you even begin to consider a jump into the foreign real estate investment pool, it’s important to become as knowledgeable about the entire process as possible. One item that is particularly important to research and understand is the tax implications that go along with property investing overseas. To that end, we’ve put together this tax guide to help U.S. real estate investors gather some much needed tax information.
Why prepare now? 5 things that smart businesses are doing TODAY to prepare fo...Grant Thornton LLP
Tax reform is top of mind for many of today’s businesses as they struggle to understand what it might mean to them, and what they should be doing to prepare. While it may be easy to be paralyzed by the uncertainty of the legislative process, a “wait-and-see” approach is a mistake. The prospect of tax reform creates tremendous new tax planning opportunities, and many of these are effective only if done before tax reform is enacted. No company should be making long-term business decisions without understanding how tax reform could affect the economic impact. Learn the five steps your business can take now to prepare for tax reform.
Finance Minister Bill Morneau provided numerous updates to the proposed changes to the taxation of private corporations and their shareholders, which were first introduced back in July as part of a consultation paper and draft tax legislation. In this edition of Monthly Perspectives, we update you on these changes.
Squared. Essential Guide for New Businesses in UKmondayfriday
Before Starting Up
Many people dream of running their own business.
In recent years this has become a reality for some who have been made redundant.
Others may decide to start their own business
in search of independence, to work for themselves
and be rewarded for their efforts financially.
Whatever the reason for considering setting up
in business, a number of challenges exist.
Despite considerable effort and financing which
may be poured into a venture, there is always a
risk of business failure.
Before you start your business, take some time spent to think through your plans as
this will minimise the risk of failure.
Think about the possible downfalls of being
self-employed. Certainty of income, both in
terms of quantity and regularity, disappears,
whilst fixed outgoings, such as mortgage
repayments, remain. Consider the loss of other
company benefits such as life assurance cover,
a company pension, medical insurance, a company
car, regular hours and holidays.
Consider the views of your family and friends.
Their support is essential. It is important they
understand that the administrative and financial
requirements of running a business can be time
consuming and stressful.
Success in business depends on many factors;
most importantly you need to critically review all
aspects of the business proposition before
progressing too far.
For easy reference, we have carved this guide
into 10 parts:
Part 1 | Selecting a Legal Entity for Your
Business
Sole Proprietorship
Partnership
Limited Liability Partnership
Limited Company
Business Structure – The Pros and Cons
Part 2 | Registering with the Tax Authorities
H M Revenue & Customs
H M Revenue & Customs – NI Contributions Office
H M Revenue & Customs - VAT
Tax Calendar
Part 3 | Accounting & Bookkeeping
Accounting Records and Record Keeping
A Word About Accounting Software Systems
Internal Control
Part 4 | Value Added Tax
Registration
Taxable Persons and Supplies
Tax Rates
Input VAT
Penalties
VAT Checklist
Money Laundering Regulations
Part 5 | Payroll Taxes
Helpful Publications
Do You Have Employees?
The Operation of a PAYE Scheme
Real Time Information
Benefits in Kind
Payroll Software
Part 6 | Income Tax and Corporation Tax
Which Accounting Year Should I Choose?
Tax Returns
Companies
Sole Traders / Partnerships
Tax Credits
Child Benefits
Part 7 | Cash Planning and Forecasting
Starting the Analysis
Cash Collections
Disbursements
Part 8 | Obtaining Credit and Financing
Your Business
How Do I Get the Money?
Business Plan
Financing Alternatives
Debt Financing Sources
Equity Financing Sources
Venture Capital Companies
Part 9 | Insurance
Required Policies
Commercial Liability Insurance
Property Insurance
Business Interruption
Fidelity Guarantee
Directors & Officers Liability
Key Person Protection
Identifying a Key Person
When is Key Person Protection Needed?
Partnership Protection
Shareholder Protection
Fee Pro
Opportunity Zone [pursuant to Subchapter Z of the Internal Revenue Code] promotes investments in certain designated distressed low-income communities with HUGE tax benefits: temporary gain deferral, basis adjustments and a permanent exclusion on the appreciation of the investment; really!!
Similar to Powerful Tax Advantages of Oil and Gas Investing (20)
Financial Assets: Debit vs Equity Securities.pptxWrito-Finance
financial assets represent claim for future benefit or cash. Financial assets are formed by establishing contracts between participants. These financial assets are used for collection of huge amounts of money for business purposes.
Two major Types: Debt Securities and Equity Securities.
Debt Securities are Also known as fixed-income securities or instruments. The type of assets is formed by establishing contracts between investor and issuer of the asset.
• The first type of Debit securities is BONDS. Bonds are issued by corporations and government (both local and national government).
• The second important type of Debit security is NOTES. Apart from similarities associated with notes and bonds, notes have shorter term maturity.
• The 3rd important type of Debit security is TRESURY BILLS. These securities have short-term ranging from three months, six months, and one year. Issuer of such securities are governments.
• Above discussed debit securities are mostly issued by governments and corporations. CERTIFICATE OF DEPOSITS CDs are issued by Banks and Financial Institutions. Risk factor associated with CDs gets reduced when issued by reputable institutions or Banks.
Following are the risk attached with debt securities: Credit risk, interest rate risk and currency risk
There are no fixed maturity dates in such securities, and asset’s value is determined by company’s performance. There are two major types of equity securities: common stock and preferred stock.
Common Stock: These are simple equity securities and bear no complexities which the preferred stock bears. Holders of such securities or instrument have the voting rights when it comes to select the company’s board of director or the business decisions to be made.
Preferred Stock: Preferred stocks are sometime referred to as hybrid securities, because it contains elements of both debit security and equity security. Preferred stock confers ownership rights to security holder that is why it is equity instrument
<a href="https://www.writofinance.com/equity-securities-features-types-risk/" >Equity securities </a> as a whole is used for capital funding for companies. Companies have multiple expenses to cover. Potential growth of company is required in competitive market. So, these securities are used for capital generation, and then uses it for company’s growth.
Concluding remarks
Both are employed in business. Businesses are often established through debit securities, then what is the need for equity securities. Companies have to cover multiple expenses and expansion of business. They can also use equity instruments for repayment of debits. So, there are multiple uses for securities. As an investor, you need tools for analysis. Investment decisions are made by carefully analyzing the market. For better analysis of the stock market, investors often employ financial analysis of companies.
Seminar: Gender Board Diversity through Ownership NetworksGRAPE
Seminar on gender diversity spillovers through ownership networks at FAME|GRAPE. Presenting novel research. Studies in economics and management using econometrics methods.
Understanding how timely GST payments influence a lender's decision to approve loans, this topic explores the correlation between GST compliance and creditworthiness. It highlights how consistent GST payments can enhance a business's financial credibility, potentially leading to higher chances of loan approval.
The secret way to sell pi coins effortlessly.DOT TECH
Well as we all know pi isn't launched yet. But you can still sell your pi coins effortlessly because some whales in China are interested in holding massive pi coins. And they are willing to pay good money for it. If you are interested in selling I will leave a contact for you. Just what'sapp this number below. I sold about 3000 pi coins to him and he paid me immediately.
+12349014282
BYD SWOT Analysis and In-Depth Insights 2024.pptxmikemetalprod
Indepth analysis of the BYD 2024
BYD (Build Your Dreams) is a Chinese automaker and battery manufacturer that has snowballed over the past two decades to become a significant player in electric vehicles and global clean energy technology.
This SWOT analysis examines BYD's strengths, weaknesses, opportunities, and threats as it competes in the fast-changing automotive and energy storage industries.
Founded in 1995 and headquartered in Shenzhen, BYD started as a battery company before expanding into automobiles in the early 2000s.
Initially manufacturing gasoline-powered vehicles, BYD focused on plug-in hybrid and fully electric vehicles, leveraging its expertise in battery technology.
Today, BYD is the world’s largest electric vehicle manufacturer, delivering over 1.2 million electric cars globally. The company also produces electric buses, trucks, forklifts, and rail transit.
On the energy side, BYD is a major supplier of rechargeable batteries for cell phones, laptops, electric vehicles, and energy storage systems.
how to sell pi coins in South Korea profitably.DOT TECH
Yes. You can sell your pi network coins in South Korea or any other country, by finding a verified pi merchant
What is a verified pi merchant?
Since pi network is not launched yet on any exchange, the only way you can sell pi coins is by selling to a verified pi merchant, and this is because pi network is not launched yet on any exchange and no pre-sale or ico offerings Is done on pi.
Since there is no pre-sale, the only way exchanges can get pi is by buying from miners. So a pi merchant facilitates these transactions by acting as a bridge for both transactions.
How can i find a pi vendor/merchant?
Well for those who haven't traded with a pi merchant or who don't already have one. I will leave the what'sapp number of my personal pi merchant who i trade pi with.
Message: +12349014282 VIA Whatsapp.
#pi #sell #nigeria #pinetwork #picoins #sellpi #Nigerian #tradepi #pinetworkcoins #sellmypi
Yes of course, you can easily start mining pi network coin today and sell to legit pi vendors in the United States.
Here the what'sapp contact of my personal vendor.
+12349014282
#pi network #pi coins #legit #passive income
#US
5 Tips for Creating Standard Financial ReportsEasyReports
Well-crafted financial reports serve as vital tools for decision-making and transparency within an organization. By following the undermentioned tips, you can create standardized financial reports that effectively communicate your company's financial health and performance to stakeholders.
What website can I sell pi coins securely.DOT TECH
Currently there are no website or exchange that allow buying or selling of pi coins..
But you can still easily sell pi coins, by reselling it to exchanges/crypto whales interested in holding thousands of pi coins before the mainnet launch.
Who is a pi merchant?
A pi merchant is someone who buys pi coins from miners and resell to these crypto whales and holders of pi..
This is because pi network is not doing any pre-sale. The only way exchanges can get pi is by buying from miners and pi merchants stands in between the miners and the exchanges.
How can I sell my pi coins?
Selling pi coins is really easy, but first you need to migrate to mainnet wallet before you can do that. I will leave the what'sapp contact of my personal pi merchant to trade with.
+12349014282
2. P L A T F O R
M
Speakers
Casey Minshew is the COO and a Co-Founder
of EnergyFunders. He is an avid entrepreneur,
with over 15 years of start-up expertise.
Wesley Middleton is a CPA and an entrepreneur with over
20 years of experience in oil and gas, construction and
manufacturing. Wesley is also a managing tax partner at the
prestigious accounting firm of Middleton Raines+Zapata, LLP.
For informational purposes only. Consult your own tax, legal and accounting advisors before engaging in any transaction.
2
3. P L A T F O R
M
We are a top tier CPA Firm in Houston, Texas with Oil &
Gas, Construction, Manufacturing, Healthcare, 401k Audit
and Professional Services expertise. In addition to the
audit and tax services we provide to these industries, we
provide FAS109 and FIN48 services to SEC companies
and tax consulting and compliance services to SEC
companies and officers.
MRZ was named to the 2016 list of Houston's Best and
Brightest Companies to Work For by the National
Association for Business Resources.
3Who is Middleton Raines+ Zapata?
For informational purposes only. Consult your own tax, legal and accounting advisors before engaging in any transaction.
4. P L A T F O R
M
• EnergyFunders.com is an online investment marketplace disrupting the energy
industry by evolving the way capital investment and energy projects come
together to generate more profitable commerce.
• Founded in 2013, the Houston-based fintech company currently offers
professionally vetted oil and gas projects as financial opportunities for
accredited investors nationwide and internationally with minimum investments
amount of $5,000. In the aggregate, several million has been raised on the
EnergyFunders.com platform.
For informational purposes only. Consult your own tax, legal and accounting advisors before engaging in any transaction.
About EnergyFunders 4
5. P L A T F O R
M
Legal Disclosures
EnergyFunders, LLC, and its affiliates, subsidiaries, parent companies, managers, officers,
employees, and agents, do not provide tax, legal, investment, or accounting advice and are not
providing you with tax, legal, investment, or accounting advice through this presentation.
Middleton Raines+Zapata, LLP, is not providing you with tax, legal, investment, or accounting
advice through this presentation. This material has been prepared for informational purposes
only, and is not intended to provide, and should not be relied on for, tax, legal, investment or
accounting advice. You should consult your own tax, legal, investment, and accounting advisors
before engaging in any transaction. By viewing this presentation, you acknowledge and agree
that you are not relying upon this presentation for any tax, legal, investment, or accounting
advice and will consult your own advisors before engaging in any transaction.
For informational purposes only. Consult your own tax, legal and accounting advisors before engaging in any transaction.
5
6. P L A T F O R
M
What is so powerful about Oil & Gas Tax Deductions?
For informational purposes only. Consult your own tax, legal and accounting advisors before engaging in any transaction.
Deduct up to
100% of your
investment
over 7 years
Up to 80% can be
deducted in the
year you make
the investment
You only pay
tax on only 85%
of the revenue
you receive
6
7. P L A T F O R
M
• In 1986, Congress passed a bipartisan, sweeping piece of legislation entitled
the “Tax Reform Act of 1986.” This bill established specific considerations
related to domestic oil and gas development, creating what Newsweek would
later say, “is the very best tax advantaged Investment.”
• Specifically, Intangible Drilling Cost (IDCs) were allowed to be deducted
against active income. Typically, oil and gas exploration has been considered a
passive activity for most investors. From a tax perspective, this changed under
Reagan and the Tax Reform Act.
For informational purposes only. Consult your own tax, legal and accounting advisors before engaging in any transaction.
Reagan Tax Reform Act of 1986 7
8. P L A T F O R
M
• Intangible Drilling Cost (IDC) Deduction – The intangible expenditures of drilling (labor,
chemicals, drilling mud etc.) typically 60-80% of drilling, re-working or re-completing wells.
The IDC is 100% deductible in the first year. (Ex: A $100,000 investment would yield up to
$75,000 in deductions against taxes on active income in the first year of the venture.)
• Tangible Drilling Cost (TDC) Deduction – The total amount of the investment allocated
to equipment may be 100% tax deductible. Using the above example, about $25,000 may
be deducted as depreciation over a 7-year period.
• Accordingly, you could deduct your entire investment over 7 years, no matter the level of
success of the project in which you invested.
For informational purposes only. Consult your own tax, legal and accounting advisors before engaging in any transaction.
Tax Incentives for Oil and Gas Investing 8
9. P L A T F O R
M
• Depletion Deduction – This deduction excludes from taxation 15% of all gross
income from oil and gas wells. This special advantage is limited solely to small
companies and investors. Any company that produces or refines more than
50,000 barrels of oil per day is ineligible. Entities that own more than 1,000 barrels of oil
per day, or 6 million cubic feet of gas per day, are excluded as well. Thus, investments in
projects operated by many smaller operators would allow an investor to take advantage
of this deduction.
• Example: If you earn $10,000 in income on your oil and gas investment, and claim the
deduction, you would pay taxes on only $8,500 of the income. $1,500 of the income is
excluded from taxation.
For informational purposes only. Consult your own tax, legal and accounting advisors before engaging in any transaction.
Tax Incentives for Oil and Gas Investing (cont.) 9
10. P L A T F O R
M
• The income from an oil and gas property is usually divided between the mineral interest owner (the
royalty owner) and the operator (the working interest owner).
• Net revenue interest is the total revenue interest that an entity owns in a particular oil or gas production
unit, such as a lease, well, or drilling unit. In a typical lease arrangement, the royalty owner retains a
12.5% - 25% net revenue interest and the working interest owner owns a 87.5% - 75% net revenue
interest.
• The royalty owner owns a right to receive income. The working interest owner has liability for expenses
but also owns the right to receive income. The working interest is subject to all of the costs of exploring
for, developing, and producing the minerals. The holder of the working interest can retain ownership
throughout the life of the lease or assign all or part of the interest during the term of the lease.
• The royalty owner incurs none of the cost to explore, develop, or operate the mineral production.
For informational purposes only. Consult your own tax, legal and accounting advisors before engaging in any transaction.
What is a Working Interest? 10
11. P L A T F O R
M
• Costs to explore, develop, or operate the mineral production are borne by the
working interest owner.
• This is where the investor comes into play. In order to fund the exploration,
development, or operations, the working interest owner transfers various interests
in the property to the investor in exchange for their capital.
• As the operator begins the exploration and development of the property, these
costs are allocated to the investor. In the beginning, these are geological survey
costs, well equipment (also called tangible costs), and intangible drilling (IDC)
costs which, for tax purposes, are allowed to be deducted rather than capitalized.
For informational purposes only. Consult your own tax, legal and accounting advisors before engaging in any transaction.
What is a Working Interest? (cont.) 11
12. P L A T F O R
M
• The partnership passes these IDCs through separately to the investors on the
Schedule K-1. As an investor, you will receive an annual Schedule K-1 for each
investment.
• Normally these passive activity losses would only be deductible to the extent that the
investor has passive income.
• But if you own a working interest in any oil or gas property, either directly or through
an entity that doesn't limit the taxpayer's liability with respect to the interest, it is non-
passive activity (that is, active activity), regardless of the taxpayer's participation,
and may be deducted against earned income.
For informational purposes only. Consult your own tax, legal and accounting advisors before engaging in any transaction.
Why would I want a Working Interest investment? 12
13. P L A T F O R
M
For the purposes of this rule, an entity limits the liability of the taxpayer if the
interest in the entity is in the form of:
• a limited partnership interest in a partnership in which the taxpayer isn't a
general partner;
• stock in a corporation; or
• an interest in any other entity that, under applicable state law, limits the
potential liability of the holder of an interest for all obligations to a
determinable fixed amount – such as an LLC or similar entity type.
For informational purposes only. Consult your own tax, legal and accounting advisors before engaging in any transaction..
What Limits a Taxpayer’s Liability? 13
14. P L A T F O R
M
• One of the most common solutions to this problem is to simply use a limited
partnership as the investment vehicle but have an investor invest as an
“Investor General Partner” that converts to an “Investor Limited Partner” upon
production or after the development of the project is completed. This is the
best of both worlds!
• As an investor, this causes your investment to be non-passive (i.e., “active”)
during the development of the project, which allows you to take this
deduction against your earned income.
For informational purposes only. Consult your own tax, legal and accounting advisors before engaging in any transaction..
How can you make the investment active? 14
15. P L A T F O R
M
• Investors who elect to invest as general partners in order to take full advantage of
the available tax benefits will be directly liable for the liabilities of the partnership if
any liabilities are incurred while they are general partners.
• If they invest as limited partners, their liability will be limited to the amount they
invest; however, their ability to use the IDC deductions to offset income from
salaries and other non-passive income will be eliminated.
• In addition, a general partnership interest cannot be owned directly or indirectly
through an entity that limits the investor’s liability. The risks must be to the
individual investor.
• In order to mitigate these risks, an oil and gas partnership typically will provide
insurance against certain risks.
For informational purposes only. Consult your own tax, legal and accounting advisors before engaging in any transaction.
What are some of the risks when investing as a
General Partner?
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16. P L A T F O R
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• Operators are required to hold a Commercial General Liability (CGL) policy
in an industry-standard amount that covers various known foreseeable risks.
• Along with and through its manager, each limited partnership or fund is a
named insured on a $2 Million/$1 Million/$10,000 SIR CGL and a $5 Million
Umbrella Excess policy.
• An Investor General Partner converts to an Investor Limited Partner after
development of the project is complete so that the investor can claim IDC
deductions against earned income but limit his or her liability going forward.
• Operators usually require third party companies to use subcontractors who
also carry CGL’s.
For informational purposes only. Consult your own tax, legal and accounting advisors before engaging in any transaction.
Risk Mitigation Typically Provided on the
EnergyFunders Platform to Investors
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17. P L A T F O R
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• Deduct or Capitalize: Deduct in Year 1 or Capitalize over 60 months.
• How to make the election: You elect to deduct IDCs as a current business expense by
taking the deduction on your income tax return for the first tax year you have eligible
costs. No formal statement is required. If you file Schedule C (Form 1040), enter these
costs under “other expenses.”
• Nonproductive well: If you capitalize your IDCs, you have another option if the well is
nonproductive. You can deduct the IDCs of the nonproductive well as an ordinary loss.
See: https://www.irs.gov/publications/p535/ch07.html for more details
For informational purposes only. Consult your own tax, legal and accounting advisors before engaging in any transaction.
How to Take the Deductions on Your Tax Return 17
18. Thank You for Joining Us!
We’re happy to take your
questions at this time.