when we invest in oil and gas projects, we receive approximately a 70%
tax deduction and a depletion allowance -- another tax break -- for
income from oil and gas revenues. That means if I invest $10,000 in
oil and gas, I can deduct approximately $7,000 from my income as well
as receive a tax break for income from the sale of the oil and gas.

I read the above article from yahoo finance. Is this correct statement
? I would like to know more like this investments which have tax
break.

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Clarification of Question by monic_b-ga on 14 Oct 2005 11:03 PDT

can anyone answer this question ASAP

Thank You.

im not an accountant but i used to sell oil and gas projects. the way
i have understood it in Texas at least is you receive a tax break of
anywhere from 70-75% of the investment that you realize in the year of
the investment. If the well is a "dry hole" or non-producing well you
can realize the tax break on 100% of the investment that year. IF it
is a producing well you amortize the left over 25-30% on the estimated
life of the well. The amount you can have a tax break on has something
to do with how much of the project was budgeted for fixed costs like
materials.