One reason investors look at oil and gas is the potential tax benefits.
Certain investments can include intangible drilling costs, tangible drilling costs, and a depletion allowance.
These tax benefits may be used against earned income, including W-2 income, when the requirements are met.
That means a large portion of what you invest in year one could potentially be used as a tax deduction.
Depending on your tax bracket, that can add up to meaningful tax savings in the first year.
The actual tax treatment depends on the investment and your individual situation.
Save this if you want to understand the tax side of oil and gas investing.