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The Last Legal Tax Shelter for Accredited Investors – A Solution for the US Economy

There are so many financial risks involved with oil and gas exploration, as well as so many up-front costs to starting a new well, the government knows that the benefits of taking such a risk must make it worth it.
Albuquerque, NM, United States of America (prbd.net) 13/07/2011
The world’s supply of oil is limited, and whenever there is a limited supply of anything that is in high demand, the price of such a product tends to increase over time. In normal circumstances, that might be enough to incentivize investors, but in the case of oil and gas investment and exploration, more incentives are required to overcome the tremendous financial risk involved. In fact, the risks are high enough with oil and gas investing that one must qualify to be such an investor by having a substantial net worth and expendable income.

It’s not a matter of whether or not an investor will lose money on an oil or gas investment but when. It may take more than one attempt at establishing a successful well before the oil and gas investments pay off, but even unsuccessful attempts offer benefits to the investors who support increasing the domestic supply of oil and gas by investing in oil and gas exploration in the United States. Ending reliance on foreign oil supplies while at the same time increasing domestic production offers an attractive solution to some of the economic woes facing the country.

John Maynard Keynes once said, “The avoidance of taxes is the only intellectual pursuit that still carries any reward.” In the Keynesian spirit, the IRS, recognizing the risks involved in oil and gas investment, have provided incentives for investors in the form of income deductions, tax breaks, and allowed write-offs that would not be considered for most other investment opportunities. It is precisely these enticements – along with the enormously profitable payout potential when a successful well has been established – that will help the U.S. economy.

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