123ArticleOnline Logo
Welcome to 123ArticleOnline.com!

ALL >> Investing---Finance >> View Article

Advantages Of Investments In Oil

By Author: Tai Garding
Total Articles: 4

It is actually true there are various investment choices for professional investors to make. But the most sophisticated investors that have sufficient capital for investment prefer to invest in oil and gas because of the advantages of investing in oil. Needless to say, like any other investment, sophisticated investors should do their hard work at studying the numerous investment benefits and possibilities before moving forward.

When speaking about advantages of investing in oil, tax advantages comes first. Government provides attractive tax benefits for stimulating domestic gas and oil manufacture. As you may be aware, drilling is a really expensive process. The costs connected to drilling are sorted as tangible and intangible expenses.


One hundred per-cent deductible intangible costs
The cost of drilling machines, labor charges and all other resources related to drilling operation fall into the intangible expenses. This in actual fact constitutes a significant percentage of the drilling cost which is one hundred percent deductible. In fact, as it is regardless if the well produces oil or not, the risk connected with the investment is reduced.


When ti comes to tangible costs, you might be surprised to know that this also may be 100% deductible. In other words, over a 7 year time span, you can deduct tangible costs as depreciation.

Added financial gain as land owners

If you own the ground where oil is drilled, you make more profit from your investment because this is a royalty where you pick up a certain percentage of the oil revenue generated from the land. So should you invest in oil through royalties, you assume no liability but you should keep in mind that you will be not eligible for similar tax advantages as other forms of benefits.

Investing in oil may offer many other forms of tax advantages like deductible lease rates, an alternative minimum tax and minor producer tax exemptions. The number one benefit of investing in oil is that contrary to other investments, working interests in oil is considered an active income. To maximize the odds of high earnings, any net losses are offset against some other income.

With the correct investment and guidance, a sophisticated investor could reap their benefits in oil investments in the first year of investment. As a matter of fact, within 24 months you can deduct 100% of geophysical and geological oil investment expenditure.

Consulting an investment specialist, CPA or a tax attorney is strongly recommended because that may help you gain maximum benefits from oil investments. This is important to avoid the scams investors.

Increased demand has lead to increased pressure
Investors considering investing in oil find that modern technology has revolutionized how we locate and extract oil, thereby lessening its risks. Nevertheless the global demand has also increased so much that it's difficult to maintain the required supply. This increase in demand has escalated the oil rates by multiple folds and thus it is an excellent investment opportunity for you to think about.

So investing in oil offers benefits that are perfect for well-off investors. Aside from the attractive tax rewards, this investment option gives several benefits that you cannot get in any other kind of investment. So making investment in oil is unquestionably a good option for you. The benefits related to this investment greatly outweigh the minor downsides associated with it.oil investing

Total Views: 60Word Count: 544See All articles From Author

Investing / Finance Articles

1. How Bad Credit Loans Work For Better Financial Solutions In The Uk?
Author: Sara James

2. The Free Forex Robot Minimize Risk And Maximize Profits In The Forex Market
Author: johnsyanol

3. How The Internet Has Made Money Transfer To India Simple?
Author: jack

4. What Are The Major Advantages Of Bill Discounting India?
Author: Marketfinanc

5. Best Home Loan Scheme 04433044488 Documents Required For Home Loan
Author: Loansa Assit

6. Algotrade Can Help You Gain Consistent Returns On Forex Trading
Author: johnsyanol

7. Did You File Itr For Financial Year 2016-17?
Author: Did You File ITR For Financial Year 2016-17? India

8. The Advantages And Disadvantages Of Life Insurance
Author: Sushant ingh

9. Important Aspects Of Banking
Author: Sushant Singh

10. Are You In Need Of Monetary Help For Business Establishment?
Author: John Bairstow

11. Borrowing Commercial Loan Is A Secure Way For Business Owners
Author: John Bairstow

12. The Race To Transform Yourself Into A Profitable Forex Trader
Author: John Arnold

13. House Construction Loan For Bkhata Property Apply 9964563600
Author: House Construction Loan for Bkhata

14. Gst Impact On Mutual Fund Market
Author: Investment

15. Klse Market Understanding Before Investing
Author: Multi management and future solutions

Login To Account
Login Email:
Password:
Forgot Password?
New User?
Sign Up Newsletter
Email Address: