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Do any tax advantages exist as a result of the oil and natural gas production?

April 26, 2017advantages exist natural gas Oil production tax

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Do any tax advantages exist as a result of the oil and natural gas production?

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Yes. There is a depletion allowance that is able to be taken as an independent producer. This allowance is a percentage of the gross sales of oil and natural gas received from a well by an owner. This percentage starts at 15% and can be higher if the well is producing at low rates. This depletion allowance does have certain limitations and can be carried forward under certain circumstances.