Incentives Available For The Accredited Investor Interested in Investing in Oil and Gas

Investing in oil is carries a great deal of risk, which is why the government has established guidelines that require one contemplating investing in oil and gas to be an accredited investor. Being an accredited investor, however, opens up a number of oil and gas investment opportunities that not only offer enormous potential but also create options for investors seeking to diversify holdings and offset income from other investments. There are multiple benefits for the accredited investor, but becoming an accredited investor requires meeting some very specific criteria.

An accredited investor can be any of the following:

•    Any director, executive officer, or general partner of the issuer of the securities being offered or sold
•    Any natural person whose individual net worth or joint net worth with that person’s spouse at the time of purchase surpasses $1,000,000
•    Any natural person who had an income exceeding $200,000 in each of the two most recent years, or a joint income with that person’s spouse greater than $300,000 in each of those years and also expects to continue reaching that same income level in the future
•    Any trust whose assets exceed $5,000,000 that was not formed solely for the purpose of acquiring securities,
•    Any organization not formed for the purpose of acquiring securities with total assets exceeding $5,000,000
•    Any entity in which all of the equity owners are accredited investors.

Accredited investor also has the opportunity to participate in direct partnerships in oil and gas that provide the accredited investor with a number of tax deductions and write-offs that are considered to be the last legal tax shelter in the U.S. These tax incentives are designed to encourage the accredited investor to consider investing in gas and oil exploration in the United States in order to decrease the country’s reliance on foreign supplies and stimulate the domestic economy.

Watch the video presentation on Why Invest In Oil and Gas Partnerships

Such incentives are offered to an accredited investor to offset the risk they take in funding the gas and oil exploration that may result in losses. For the accredited investor, the losses incurred are affordable costs of doing business because the long-term payout of a successful well can be more than enough reward.

As well, an accredited investor often has capital gains and other income sources on which they are required to pay taxes, and the deductions and write-offs allowed to accredited investors can offset enough tax burden to balance or overcome any losses incurred in the oil and gas well exploration.