Join Early Retirement Today
Reply
 
Thread Tools Search this Thread Display Modes
Solid investment?
Old 07-12-2017, 09:04 PM   #1
Confused about dryer sheets
 
Join Date: Jul 2017
Posts: 4
Solid investment?

Hi everyone. I'm new here. Looking for any feedback on oil and gas partnerships. My understanding is that there is a significant tax deduction after investment followed by modest pay back over years. Would you recommend if I am looking for a tax deduction?
Thanks.
__________________

__________________
old-school is offline   Reply With Quote
Join the #1 Early Retirement and Financial Independence Forum Today - It's Totally Free!

Are you planning to be financially independent as early as possible so you can live life on your own terms? Discuss successful investing strategies, asset allocation models, tax strategies and other related topics in our online forum community. Our members range from young folks just starting their journey to financial independence, military retirees and even multimillionaires. No matter where you fit in you'll find that Early-Retirement.org is a great community to join. Best of all it's totally FREE!

You are currently viewing our boards as a guest so you have limited access to our community. Please take the time to register and you will gain a lot of great new features including; the ability to participate in discussions, network with our members, see fewer ads, upload photographs, create a retirement blog, send private messages and so much, much more!

Old 07-13-2017, 04:13 AM   #2
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
haha's Avatar
 
Join Date: Apr 2003
Location: Hooverville
Posts: 22,193
For the most part these as most tax shelters make money for the promoters and lose money big time for the investors. YMMV, but likely not.
__________________

__________________
"As a general rule, the more dangerous or inappropriate a conversation, the more interesting it is."-Scott Adams
haha is online now   Reply With Quote
Old 07-13-2017, 04:29 AM   #3
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
braumeister's Avatar
 
Join Date: Feb 2010
Location: Northern Kentucky
Posts: 7,812
Nothing intrinsically wrong with the concept, but without knowing anything about your situation it would be foolish to offer advice. Why not introduce yourself first?

Hi, I am... - Early Retirement & Financial Independence Community
__________________
Pas de lieu Rhône que nous.
braumeister is online now   Reply With Quote
Old 07-13-2017, 08:56 AM   #4
Recycles dryer sheets
OldShooter's Avatar
 
Join Date: Mar 2017
Location: City
Posts: 447
In 40+ years of investing, I have learned that the more complicated the investment the more likely it is to benefit the seller rather than the buyer. So I personally would not take a second look at a contraption like you describe.

I have also observed that people get enthralled with tax deductions and tax-free investments like muni bonds in a kind of religious way, disregarding the details of their tax situation and disregarding the fact the tax-favored investments always have a lower yield specifically because of the tax savings. Sorting this out is complicated and few seem to do it.

As far as a recommendation: If you are contemplating making a significant investment, like over 5% of your investable assets and well into five or six figures $$, you should hire a tax- and investment- savvy CPA for a few hours to review your entire tax situation to see if this investment is likely to be of any significant benefit to you on a net basis.

If your proposed investment is not significant, they just forget about it. It's unlikely to be a good deal and even if it was, the investment won't lift your boat enough to matter -- that's the definition of "insignificant."
__________________
OldShooter is offline   Reply With Quote
Old 07-13-2017, 09:03 AM   #5
Recycles dryer sheets
jetpack's Avatar
 
Join Date: Aug 2013
Posts: 289
I remember investing in an oil & gas pipeline partnership. I never quite understood
the tax ramifications, and I don't know if they helped or hurt me... but they did complicate
and delay my tax return. Schedule K.
Some are certainly legitimate and money making. for example Williams Partners LP (wpz).. but for me the complication wasn't worth it.
__________________
43 and FIREd.
jetpack is online now   Reply With Quote
Old 07-13-2017, 09:07 AM   #6
Confused about dryer sheets
 
Join Date: Jul 2017
Posts: 4
Thanks all for the feedback. Much appreciated. I am thinking of using the oil & gas partnership deduction to offset significant capital gains tax. My understanding is that it could be a wash.
__________________
old-school is offline   Reply With Quote
Old 07-13-2017, 09:16 AM   #7
Recycles dryer sheets
 
Join Date: Jul 2015
Location: Beaverton
Posts: 201
In one of my investment portfolios that is managed has 40% which is invested in storage and transportation of oil and gas. These give me a steady income yearly as all profits are passed back to owners.

A couple years ago they took quite a dip as gas prices dropped. This was mainly from panic selling as they don't have any correlation to oil prices. That has come back and then some since.

From a tax standpoint there is no beneficial tax treatment for the most part and I spend considerable time on my taxes filling out K-1's and dividend profits.

It has been part of my manager's strategy for many years and they are adept at understanding the industry quite well.
__________________
Bailed at 60 on 4/1/16. Still have a silly grin on my face every day.
Bir48die is offline   Reply With Quote
Old 07-13-2017, 09:21 AM   #8
Recycles dryer sheets
OldShooter's Avatar
 
Join Date: Mar 2017
Location: City
Posts: 447
Quote:
Originally Posted by old-school View Post
... I am thinking of using the oil & gas partnership deduction to offset significant capital gains tax. My understanding is that it could be a wash.
TANSTAAFL. Capital gains taxes are low already. IMO it is extremely unlikely that your net cash in pocket will be positively affected by purchasing this contraption. But only a good CPA can tell you for sure.

How much money or % of your investable assets are you thinking about putting into this?
__________________
OldShooter is offline   Reply With Quote
Old 07-13-2017, 09:29 AM   #9
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
haha's Avatar
 
Join Date: Apr 2003
Location: Hooverville
Posts: 22,193
Quote:
Originally Posted by Bir48die View Post
In one of my investment portfolios that is managed has 40% which is invested in storage and transportation of oil and gas. These give me a steady income yearly as all profits are passed back to owners.

A couple years ago they took quite a dip as gas prices dropped. This was mainly from panic selling as they don't have any correlation to oil prices. That has come back and then some since.

From a tax standpoint there is no beneficial tax treatment for the most part and I spend considerable time on my taxes filling out K-1's and dividend profits.

It has been part of my manager's strategy for many years and they are adept at understanding the industry quite well.
OP has not given adequate information, and that is his right. However this makes our ideas mainly useless.

Since there is no shelter as the term would ordinarily be applied in publicly traded partnerships (PTP), I assumed he was being hustled for a drilling partnership. My take on these is that if Aubrey McClendon couldn't win at drilling with his industry and political connections, how could Joe Blow?

Ha
__________________
"As a general rule, the more dangerous or inappropriate a conversation, the more interesting it is."-Scott Adams
haha is online now   Reply With Quote
Old 07-13-2017, 10:02 AM   #10
Confused about dryer sheets
 
Join Date: Jul 2017
Posts: 4
OldShooter my idea is to invest in the oil gas drilling only enough to wash the CGs. Probably no more than 100k and less than 10% of my portfolio. I was not solicited or cold called. It was a suggestion from a reputable financial advisor. Pay the IRS and get nothing or invest in the partnership and get deduction and modest return over 5-7 years depending on oil prices
__________________
old-school is offline   Reply With Quote
Old 07-13-2017, 10:08 AM   #11
Recycles dryer sheets
OldShooter's Avatar
 
Join Date: Mar 2017
Location: City
Posts: 447
Quote:
Originally Posted by old-school View Post
OldShooter my idea is to invest in the oil gas drilling only enough to wash the CGs. Probably no more than 100k and less than 10% of my portfolio. I was not solicited or cold called. It was a suggestion from a reputable financial advisor. Pay the IRS and get nothing or invest in the partnership and get deduction and modest return over 5-7 years depending on oil prices
OK, sounds logical and you're dealing with significant money.

As I said, I recommend consulting a CPA on the tax aspects. In this case I would also ask if, how, and how much the advisor is getting paid and I would ask about the liquidity of the investment. Some of these deals are proprietary to a particular broker company and cannot be moved. Valuation can also be problematic. I might also consider splitting the investment between two similar deals just as a risk reduction. If you still see all green lights then you've done your due diligence and can make the decision.
__________________
OldShooter is offline   Reply With Quote
Old 07-13-2017, 10:11 AM   #12
Thinks s/he gets paid by the post
 
Join Date: Nov 2011
Posts: 2,135
Some/many/most such investments generate passive losses. AFAIK those passive losses cannot be deducted from ordinary capital games (which are considered active gains). Someone please correct me if my understanding is incorrect.
__________________
GrayHare is online now   Reply With Quote
Old 07-15-2017, 05:15 PM   #13
Confused about dryer sheets
 
Join Date: Jul 2017
Posts: 4
Thanks again for the feedback everyone.
__________________

__________________
old-school is offline   Reply With Quote
Reply


Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
 
Thread Tools Search this Thread
Search this Thread:

Advanced Search
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


Similar Threads
Thread Thread Starter Forum Replies Last Post
Thanks for the Solid USAA mickeyd FIRE and Money 15 03-24-2013 10:08 AM
Solid Financial Foundation, Rocky Marriage jimday1982 Hi, I am... 13 10-11-2010 12:43 PM
Any Solid 8% Dividend stocks or MFs? rsingh6675 Stock Picking and Market Strategy 25 03-09-2010 12:30 PM
Solid IU interview with Heavy Hitters mickeyd FIRE and Money 5 06-18-2008 10:19 PM

 

 
All times are GMT -6. The time now is 12:52 PM.
 
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2017, vBulletin Solutions, Inc.