MEET THE MARATHON TEAM
Marathon Financial is actively looking for investment opportunities in all facets of the energy sector ranging from production, storage, distribution and consumption. While our administration begins the country’s migration towards energy independence, investment opportunities continue to emerge.
The Department of Energy was allocated $40B from the 2009 Stimulus Package and charged with the responsibility of investing in our energy future.
As a result of our recent energy crisis we believe there is tremendous growth potential for alternatives as well as domestic oil and gas exploration. We continue to review opportunities daily and focus on organizations that demonstrate experience and a measured approach to growth. Our relationships, developed over many years within the industry, allow our clients to invest with confidence.
Potential Tax Benefits
Intangible drilling costs (IDC's) - IDC's usually make up about 60 to 65 percent of an investment in an oil and gas well and can be written off in the first year.
These costs include the amounts necessary for the drilling of wells and the preparation of wells for the production of oil and gas, such as wages, fuel, repairs, hauling, supplies, clearing of ground and geological work in preparation for the drilling, construction of derricks, tanks, pipelines, and other physical structures necessary for drilling. If it were not for the preferential income tax treatment, these types of expenditures would be considered nondeductible capital expenditures.
Tangible Drilling Costs (TDCs) - TDC's make up the remaining 35 to 40 percent of well costs and are written off over time, but are subject to the expensing deduction allowable in section 179 of the Internal Revenue code of 1986, as amended.
TDC's are tangible personal property, commonly referred to as lease and well equipment, and include, pipe, casing, tubing, tanks, engines, and machines.
Dry Holes - If the well is a dry hole, the entire investment can be written off in the first year.
Depletion - In addition to a depreciation deduction on TDC's, there is a deduction for the depletion of the mineral reserves. The depletion deduction is the greater of (1) an allocated portion of the adjusted basis of the depletable property (cost depletion); or (2) a statutory percentage of the gross income from the property (percentage depletion). The statutory percentage depletion allowance for independent gas producers is 15%.
In some cases, tax incentives related to oil and gas investments can reduce an investor's tax bracket entirely. At a minimum, the tax breaks associated with oil and gas investments materially reduce the investors cost of investment, thereby increasing their after-tax return.
Investors should consult with their tax advisors regarding the applicability and impact of these tax laws to their personal tax situation. The above tax law illustrations are for general information only and not intended to be interpreted as individual tax advice. The tax laws do change from time to time and their applicability can change depending on each individual's method of investment and personal tax situation.
... ... ... ..Marathon Financial Group is a registered broker-dealer and a member of the Financial Industry Regulatory Authority (FINRA) and the Securities Investor Protection Corporation (SIPC).
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