By Rebecca Torrellas, Online Editor
Did you know investors can use real estate to exchange for an oil and gas producing well as a tax deferred investment?
According to Malbur Exchange Group & Associates, LLC, (MEGA) many investors are unaware they can sell real estate properties and roll all the money forward into oil or gas producing wells without paying any tax on the profits from the sale of their real estate property. The IRS considers real estate and producing oil and/or gas properties as “like-kind.” What this means as it comes to real estate is that all property is like-kind to all other real estate or other tangible property that is similar in nature and characteristics.
Congress provided the tax incentive to stimulate domestic natural gas and oil production financed by private sources and help reduce U.S. dependence on foreign oil. With oil prices fluctuating due to political turmoil in the Middle East and North Africa, and the Japan disaster, the incentive couldn’t have come at a better time.
As oil and natural gas from domestic reserves help to reduce U.S. dependence on foreign imports, Congress has provided tax incentives to stimulate domestic natural gas and oil production financed by private sources. These incentives were placed in the U.S. Tax Code by Congress to make participation in oil and gas ventures one of the best tax advantaged investments.
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