Oil and gas, as the primary source of energy for the mankind, has been playing a key role in our lives since the beginning of the industrial revolution. Being one of the leading players in the oil and gas industry, the United States of America is the largest market and the top consumer of all the oil and gas produced in the world. That means, investing in the energy sector in the USA holds great advantages ranging from high profitability to tax savings. This is the reason why an increasing number of accredited investors and HNIs are turning to energy investment projects. Continuing on the subject, we present the the top reasons why energy investment projects are among the favorite investment options for qualified investors. Read on.
Increasing Demand
With increasing consumer demand in the USA, China, India and other regions of the world, the need for oil and gas production has been steadily increasing. Given that, the government of the United States of America is promoting and encouraging investments in this sector. Fig Tree Capital Ventures plays an important role in bringing the energy sector and investors together, thereby contributing to the progress of the oil and gas industry. If you are looking for an investment option that promises sustainable high returns, the oil and gas investment consultants at Fig Tree Capital Ventures will be happy to help.
Significant Tax Savings
The US Government offers an array of oil and gas investment tax deductions to attract more investment to boost the development of the industry. In fact, investors get an additional 15% exemption from the gross income from their investment in small production units. There are three main tax benefits you need to understand how energy investing tax advantages outweigh the tax advantages of other investment vehicles. They are:
Intangible Drilling Cost
This type of cost includes all the cost of producing oil and gas but doesn’t include the drilling equipment. They generally cover between 65 to 80% of total cost and are 100% deductible in the year they incurred.
Tangible Drilling Cost
The cost of equipment used for the production of oil and gas are considered the tangible cost or a direct cost and generally covers 20 to 35% of the total cost. They are 100% deductible but over a period of 7 years.
Active vs Passive Income
Any losses incurred during the wellhead production are considered as active income and can be offset against other income forms like capital gains, interests, and wages.
Sustainable Returns
Energy investment projects have good potential to deliver steady returns for years. Apart from the energy investment revenues, the major benefit of investing in the oil and gas industry are the tax benefits. It is however important that your investment is managed by a reputable investment services company such as Fig Tree Capital Ventures.
Wrap Up
Knowing these benefits may have peaked your interest. If you have any question or need any guidance, we would love to assist you. To learn more about our energy investment projects and the energy investment tax advantages they entail, call us at (866) 300-2170 or fill out our contact form and one of our energy investment consultants will get in touch with you shortly.
