Tax Benefits
Everest Energy’s investment strategy offers significant tax benefits — up to 100% tax deductible — to accredited investors. The U.S. government incentivizes accredited investors to fund domestic oil and gas development by making these investments tax deductible.
How the deduction breaks down
Up to 80% of the investment amount is tax deductible in the year of the investment. The remaining amount is amortized over a 5–7 year period. Investors commonly use these deductions to offset personal income and/or capital gains from other ventures.
Intangible drilling costs (IDCs) — labor, fuel, site preparation, and other non-salvageable expenses — are typically deductible in the year they are incurred.
Tangible drilling costs (TDCs) are recovered by amortization over the following 5–7 years.
Together, the IDC and TDC treatment can make an investment up to 100% tax deductible.
These deductions are governed by IRS Code Section 263C. Consult your tax advisor to determine how it applies to your specific situation.
Tax breakdown
| Investing | Not investing | |
|---|---|---|
| Annual income estimate | $1,000,000 | $1,000,000 |
| Investment amount | $200,000 | — |
| Tax write-off (up to 80%) | $160,000 | — |
| Adjusted taxable income | $840,000 | $1,000,000 |
| Income tax (@ 40%) | $336,000 | $400,000 |
| Tax savings | $64,000 | — |
Illustrative example only. Actual figures depend on your tax situation — consult your advisor.