Minimizing the pain on burnout

Journal Article · Fri Mar 01 00:00:00 EST 1985 · Oil Gas Tax Q.; (United States)

OSTI ID:5765477

Billings, A

An investment in an oil and gas shelter warrants an additional investment to fund tax liability on burnout. A relatively liquid and low-risk investment is preferable so as to assure timely satisfaction of tax liability when burnout occurs. If an investor decides to allow the shelter to die a timely death, the investment funds could be used to fund annual tax liability. In situations where a leak develops, the fund will once again be invaluable. When a leak or burnout occurs, investors may be able to do no more than minimize their maximum losses. Relief of debt on most dispositions will be deemed receipt of cash, thus triggering gains. Ordinary income will result by operation of Code Sections 1245, 1250, and 1254. Bankruptcy or a charitable contribution will grant limited reprieve from tax losses; however, economic losses will still result.

• Research Organization: Texas A and M Univ., College Station
• OSTI ID: 5765477
• Journal Information: Oil Gas Tax Q.; (United States), Vol. 33:3
• Country of Publication: United States
• Language: English

Related Subjects

02 PETROLEUM
03 NATURAL GAS
29 ENERGY PLANNING
POLICY AND ECONOMY
NATURAL GAS INDUSTRY
TAX CREDITS
PETROLEUM INDUSTRY
LIFETIME
INVESTMENT
INDUSTRY
021000* - Petroleum- Legislation & Regulations
031000 - Natural Gas- Legislation & Regulations
294002 - Energy Planning & Policy- Petroleum
294003 - Energy Planning & Policy- Natural Gas