One way that you can make your money work for you is to invest it. There are many ways to invest money today, all of which have some element of risk. When you think about investing, you may think about investing in stocks, which are shares of a company, or commodities, which are investments of tangible products such as crude oil, gold and even corn. When the price of the stock or commodity goes up, you make money on your investment. The money that you make is called capital gains and you are taxed on these earnings.
When you invest in natural gas exploration, however, you are taking a risk, but with the safety net of a significant tax write off if the well turns out to be dry. Many people, when they imagine drilling, think only about drilling for oil. Not all drilling produces oil, however. In some cases, it can produce natural gas. In other cases, it can produce both oil and natural gas. In the worst case scenario, it can produce nothing, which is called a dry well.
The government is very eager to make it attractive for individual investors to put their money into trying to find new sources of energy, especially natural gas. The United States has more natural gas deposits than any other country in the world, many of which are untapped. This is why the government gives tax advantages to those who invest in the exploration of natural gas.
Investing in natural gas is not buying the commodity. When you invest in the exploration of natural gas, you are actually going into a somewhat of a partnership with a company that is drilling for this commodity. If they find the gas, you can write off the profits over a period of years, often for the life time of the well. If they do not find gas and end up with a dry well, you can write off the loss up to 65 percent. Some investors, who have much money to invest and are looking for tax write offs, actually invest in natural gas exploration as a loss, anticipating the write off that can actually put them in a lower tax bracket.
Other investors who put their money into a project that is successful, find that they can not only reap the benefits from the investment, which add up high yield returns, but also can stretch out the capital gains over a period of seven years as well as write off the cost of the drilling. Investing in natural gas exploration is not without risk, but there are tax incentives as well as the potential for huge profits to be made in this type of investment vehicle. - 16003
When you invest in natural gas exploration, however, you are taking a risk, but with the safety net of a significant tax write off if the well turns out to be dry. Many people, when they imagine drilling, think only about drilling for oil. Not all drilling produces oil, however. In some cases, it can produce natural gas. In other cases, it can produce both oil and natural gas. In the worst case scenario, it can produce nothing, which is called a dry well.
The government is very eager to make it attractive for individual investors to put their money into trying to find new sources of energy, especially natural gas. The United States has more natural gas deposits than any other country in the world, many of which are untapped. This is why the government gives tax advantages to those who invest in the exploration of natural gas.
Investing in natural gas is not buying the commodity. When you invest in the exploration of natural gas, you are actually going into a somewhat of a partnership with a company that is drilling for this commodity. If they find the gas, you can write off the profits over a period of years, often for the life time of the well. If they do not find gas and end up with a dry well, you can write off the loss up to 65 percent. Some investors, who have much money to invest and are looking for tax write offs, actually invest in natural gas exploration as a loss, anticipating the write off that can actually put them in a lower tax bracket.
Other investors who put their money into a project that is successful, find that they can not only reap the benefits from the investment, which add up high yield returns, but also can stretch out the capital gains over a period of seven years as well as write off the cost of the drilling. Investing in natural gas exploration is not without risk, but there are tax incentives as well as the potential for huge profits to be made in this type of investment vehicle. - 16003
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