EP 144 - Oil & Gas vs Stocks: Which is Actually for Taxes?

We break down how oil and gas working interests and stock portfolios differ when taxes are the real scoreboard, from upfront deductions to long-term rates and liquidity. We walk through depletion, step-up basis, passive loss planning, and the advanced strategies that can turn a big income year into a smarter long-term wealth plan.  

• upfront tax deductions from oil and gas working interests and why stocks usually do not offer them in taxable accounts  
• how oil and gas losses can offset W-2 income, capital gains, business profits, and even Roth conversions  
• why long-term capital gains and qualified dividends often face lower federal tax rates than ordinary income  
• depletion allowance basics and how it reduces taxable oil and gas distributions  
• step-up in basis and why it can make stocks a powerful legacy asset  
• liquidity differences and how borrowing against a stock portfolio can create tax-free access to cash  
• using suspended passive losses from real estate to offset oil and gas passive income  
• capital gains mitigation tools for stocks including loss harvesting, trusts, charitable strategies, and qualified opportunity zone funds  
• timing control advantages with stocks versus third-party timing in oil and gas  
• portfolio sizing framework for oil and gas risk and diversification  
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***To see how this or any of our advanced tax strategies can help you, go to https://www.prosperalcpa.com/apply*** 

Transcript

Why Taxes Change The Comparison

SPEAKER_00 0:00

Our clients have invested millions every year into oil and gas and saved millions of dollars in taxes. And everybody knows a very common way to invest is also to invest in the stock market. And you may be thinking, if you just heard about oil and gas as a potential strategy, maybe you're thinking, how do I make sense of the difference between stocks and oil and gas? And how do I decide between the two? How do I understand this? Or maybe where should we invest the next dollar? Or maybe you're investing in both stocks and oil and gas, and you're wondering if you're look, if you're looking to save on taxes now andor in the future, what is gonna be the best and the most tax-efficient way for you to deploy your capital? Well, this is gonna be a great episode if you ever had these thoughts. Or if you are at all interested in oil and gas or stock investing and the ways to maximize tax savings and the tax advantages associated with these vehicles when you apply advanced tax reduction. So stay close attention. You might even want notes for this episode because we are going deep today as we explore whether the difference between oil and gas and stock investing when it comes to taxes and some other factors. Now, we're gonna discuss the difference between oil and gas and stock market investing when it comes to your initial savings, long-term tax savings, tax treatment of the income, potential ways to mitigate those taxes and bring down the taxes on the profits. We're gonna also cover the different types of advanced tax reduction strategies available associated with each strategy, each investment vehicle, stocks or oil and gas. And also, we're gonna help you all at the end make sense of all this stuff in understanding the difference in the tax treatment and the tax advantages of stock market investing versus oil and gas, and help you have a clear picture of where best to deploy your capital for long-term wealth building in the form of tax savings. Now, in case you don't know who my who I am, I am Mark Proberg, CPA, founder of Prospero CPA. We've been serving hundreds of clients with advanced tax reduction for high-income earners, real estate investors, and entrepreneurs. And as we go through the material now, if at any time you feel a little overwhelmed or want a more personalized answer on how this or any other potential tax reduction strategy may apply to you, you can go to prosperalcpa.com slash apply. Alright, now let's get into it. Let me just backtrack a little bit. If you go in that link, I will personally record a video for you illustrating all this, how all this may come together and the potential tax savings available to you based on your situation. Alright, now let's get into it. Let's talk first about the tax savings. So when you invest in oil and gas, you are going to reduce your taxes. And this is, and when I say this, we're talking about investing into working interests of oil and gas, which is the most common and probably what I most talk about. So you have working interests, you are investing in a partnership to take part in the profit of a project that will drill and produce oil from a well. So imagine you have$100,000 to deploy, you put it into an oil and gas investment, and now you have a tax deduction to offset your federal and maybe some of your state taxes, depending on what state you are and how they treat the loss. But that deduction would be typically anywhere from$75,000 to$90,000 reduction in tax of bull income. And when you have lower taxable income, you pay less tax. So what we really see here is an initial reduction in taxes. And then when the profits come in, you pay taxes on them. And you're also, when you do this, not only are you reducing your taxes because we're creating a deduction and it reduces your income against maybe whatever your marginal rate is that you're paying the federal taxes, but there are some advanced strategies when you work with a skilled tax professional like our firm or someone else who understands how the tax law works, not only do you reduce your taxes by the deduction, but you may even see additional tax incentives or tax advantages come in because we may bring your income low enough so that you can qualify for additional tax deductions. For instance, if we can potentially unlock an additional$30,000 state and local tax deduction to offset your federal, if we could bring your income down to$500,000. Or maybe we can give you access to more of that qualified business income deduction, which could be a 20% deduction on your income. It's a very oversimplified answer, but that's what it could be. Or maybe even phase you into the child tax credits. So there may be all these ancillary benefits before besides just reducing your taxes by the federal bracket. And you can offset any income with oil and gas. It can offset capital gains income, a Roth conversion, moving your 401k to a Roth to grow tax-free, and then you put money to oil and gas to offset that. You can offset W-2 income, which is very hard to do. You could offset business profits. So many ways that you can reduce your taxes, essentially any type of income you can offset with the losses produced from oil and gas. Now, when you put money into the stocks, there is no tax reduction. Unless you're putting money into a 401k or IRA and then invest through there, if you just put money from your name into the stocks, there's no tax reduction. So if we're looking at initial tax benefits, obviously oil and gas is a clear winner. And if maybe you are going to see a spike in your income, let's say you have a large bonus or a large transaction, drives you into a high bracket, maybe oil and gas is going to be most suitable here because it's going to eliminate the taxes on that top bracketed income and it's going to kind of smoothen out the tax treatment of your income because it'll be taxed in later years, spread out over the years and in a tax-advantaged manner. Now, let's speak of that in future years, let's talk about the long-term benefits in the form of taxes when we compare oil and gas to stock investing. Well, when you're investing in stocks, you have tax advantage income. So, you know, we we can we talk a lot about the tax advantages of real estate and all these other vehicles, but people you know, let's not overlook the opportunities here of investing in the stock market. There are certainly some amazing tax treatments or opportunities to reduce the way you are taxed compared to your W-2 or other sources of ordinary income. You're gonna have more favorable income. So when we have stocks, we are gonna have the more favorable tax treatment. We, if we uh you may find that you are paying a 15% tax on dividends, you pay or well, really what you're gonna see is that that advantage tax rate is gonna be 15 to 20 percent on dividend income or long-term capital gains, short-term capital gains is just taxed at the same marginal rate as ordinary income. Some other advantages that you're gonna see not only do you have the lower brackets for dividend and uh long-term capital gains income, but you're also not gonna pay what could be a very expensive FICA tax, which is a 15.3 percent tax on the initial, I think is$185,000 this year, changes every year. But there's no FICA taxes on that income. Now you do you might see that there's an additional 3.8% tax on that income, but what we'll see here is the top, the most you can pay tax on a long-term cap gains or dividends. And for the most part, if you're smart with your planning, you're gonna avoid the short-term cap gains. So, what we would often see is the highest you could pay on that income is gonna be 23.8% on the federal side. Now, the highest you could pay on your W2 income is a whopping 37%. So clearly, it is a lot less taxes than you would pay on your normal income. Now, let's talk about the working interest here. When we have working interest in the oil and gas, you are going to be paying taxes at your federal marginal rate, just like you would your ordinary income. So essentially, you could expect to see a tax uh the the profits tax as high as 37%, top federal bracket. So you're wondering what are the tax advantages here? Well, there's something called a depletion allowance, and that is almost similar uh to how you look at depreciation deduction with real estate. It's gonna be based on a percentage of revenue, though. And what you're gonna find, and based on what I've seen from other underwriters and and guidance, we would expect that the depletion allowance, which is a deduction typically around 15%, is typically at 15% of the revenue, not the net profit, but the revenue. And then you have expenses uh below that before you arrive at the profit and the money actually hits your account, but it's a 15% deduction from the revenue. Now, what that means for you is it typically comes out to the around 25% uh reduction in the taxes of the money that hits your account. Now, let me say that in a more easily digestible way. So let's say you get a hundred per$100,000 of distributions uh from your oil and gas. So the oil and gas may have produced$150,000 in profit and has all these deductions and expenses, and then the net effect is you receive a distribution of$100,000, right? That's your share of the profits. Well, we would expect that you would only pay taxes on 75%,$75,000 of that, because 25% of it would be eaten up by the depletion allowance. So you don't pay taxes on all the money that hits. But for that$75,000, you're paying 37%. And if you want to calculate the numbers and crunch the numbers, what you're ultimately gonna find here is that you're gonna while uh oil and gas investing, which is a passive investment, different from stocks, which is portfolio, oil and gas investing is gonna be tax efficient. However, you are gonna pay less taxes that on dividends or long-term capital gains. So essentially,$100,000 of profit compared to, if you compare that to$100,000 of long-term cap gains, the taxes on the$100,000 of profit received from oil and gas will be taxed a little bit higher than the the stock portfolio income. And then oil and gas also is still subject to that net net investment income tax of 3.8%, but still we're seeing some tax efficiencies here. In both instances, the money that hits your account is taxed more favorably than any W-2 income or any uh typical profits from your business. Now, here's one area, one opportunity where you're actually gonna see uh significant advantages from stock investing that you're not gonna see from oil and gas. And just to backtrack, by the way, I want to remind you that you're still gonna pay state taxes on all those profits as well. And we typically see the for portfolio income, the stocks or oil and gas, it's taxed the same as in the same bracket as any other type of income. Now, let's get into this, let me actually get back here. I want to talk to you about one opportunity with stock portfolio investing that you're never gonna see with oil and gas or very little with oil and gas, and that is with the step up basis. And I think a lot of people underestimate the power of step up basis with a stock portfolio income. Because when you die, and you've heard me talk about this with real estate, when you die, the value of your assets is stepped up to fair market value. So let's say I have a million dollars of stock that's worth two million dollars, that's two million dollars of unrealized future capital gains to eventually be taxed in the hundreds of thousands. Well, if I die and my heirs inherit the stock, when they inherit it the stock, if it's worth two million dollars, the stock basis is stepped up to two million dollars. Meaning, if they sold it for two million dollars, it's treated as though they you had purchased the stock at$2 million and there's zero taxes on that transaction. Now, you're not gonna see that as it's highly unlikely you'll see nearly as much or any benefit at all from step up with oil and gas because you are typically gonna see that the oil and gas is gonna run its course. There's not really any capital gains, or there might be a little bit of capital gains from that working interest in the oil and gas. Sometimes they'll sell off at the end of their exits, but for the most part, you're not gonna see that advantage of the step-up basis. So that way of avoiding capital gains tax and what could be massive from oil and gas when you're creating a legacy, that is not gonna be available with oil and gas investing. That's just for the stock portfolios for the most part. Now, here's one area that we're also gonna see more advantages from stock investing over oil and gas, which is when it comes to liquidity. When you have when you need liquidity, let's say you want to invest, but you also want to have the ability to take your money out for whatever reason. You may find that you need additional cash to inject into your business, or maybe for your personal reasons, or you just want to make sure that in case something goes wrong, you have something that is somewhat liquid where you can pull from that investment or take some of your profits out when the money is needed. Well, with stocks, you can sell it at any time, and you could also borrow against your stocks, and usually the interest rates are very low. I just looked at my stock portfolio, I was able to borrow though against the majority of the stock and pay an interest rate that was around 4.5%. So the interest is very low in case you ever want to borrow from it, and that's a way to access capital that is kind of derived from the stocks and pay zero taxes on that event at all. So you can you can borrow from it and you can sell it at any time. And by the way, you may be able to have some unrealized losses to net against some unrealized gains and net the losses and gains together when you sell and sell out with some lost positions and then not pay taxes on some of the that money you pull out as well. So your access to liquidity is gonna be pretty good with stocks. Now, with oil and gas, there may be some instances that you can sell your interests away, but it's unlikely or it's very hard to do. These are not seen as very liquid investments. Oil and gas, you're typically in it for at least five years. If you if you exit before five years, you could potentially recapture your intangible drilling cost deduction. And that's kind of the deduction that allows you to deduct as much as 75 to 100% of your investment in year one. So you typically find that if you are investing in the oil and gas, your money is expected to stay put for any for at least five years, usually five to eight five. I've seen as different types of models, but I would say usually you would want to see the project run its course for anywhere from six to eight years. We've seen longer, we've seen shorter. Now even though you have less liquidity with oil and gas, you could also expect that in the earlier years you were gonna be paid out a good amount of your share of profits. So you're gonna see the profits front-loaded with oil and gas. And not only that, you're gonna see that immediate tax savings that may result in less taxes owed, or if you're a W-2, we most likely see a refund from your investment. And that also gives you liquidity here. So it's not like you are locking your money away forever with oil and gas. However, if you want to be able to pull your capital back out and everything you've invested, stocks is gonna be much easier for that. Now let's talk about ways to offset the profits for the two vehicles. And this is really interesting because you're gonna find some unique benefits of investing in oil and gas that a lot of people overlook here. And this may tip the scales in favor of you maybe putting some extra dollars into oil and gas based on your situation here. The really cool thing about oil and gas is when the profits come in, it is treated as passive income. And why is that cool? Why is that so valuable? Well, because when we have passive income, we can use passive losses to offset the passive income. So if you are a real estate investor and you have any unused losses or suspended losses, so maybe you never had real estate professional tax status, you never had short-term rentals, you were never you've accumulated all these losses and deductions from your rental portfolio from the depreciation, or maybe we can create a bunch of losses from your rental portfolio. Most of those, most of the time, unless you are a real estate professional, which is essentially working full-time in real estate, check out my real estate professional video if you want to learn more about that. Or if you have short-term rentals, most of the time you're not going to be able to use your losses to offset your ordinary income. They're just kind of stuck there and they carry forward. You have this reserve of built-up losses on Form 8582. Now, if we have these losses and we want we're wondering how can I ever make sense of these losses? I spent all this money on the real estate, I'm incurring all these costs to run it, and I'm operating at a loss, but I'm not seeing any tax uh benefits until I exit the real estate. I want to see the benefits. Like I'm spending all this money, I deserve a tax break. Well, now you can do this by investing into oil and gas because when the profits come in, they can eat up those suspended losses. Those suspended losses will carry forward and be offset by and will offset the profits of the oil and gas. So you have let's say you have$75,000 of taxable profits from the oil and gas. Well, let's say if you've accumulated a bunch of tax deductions from your passive real estate portfolio, or maybe you're investing in syndications or whatever, those losses are gonna then carry forward and net out against your profits from the oil and gas. And now you're paying zero dollars to taxes on the profits. So all of a sudden, even though stocks are taxed less, if you have any unused or opportunities to create passive losses, this may be a really awesome opportunity to bring in cash and pay zero taxes. Now, there are other ways to offset the profits from oil and gas, and a lot of those are just what we typically see that we are those strategies we use to offset any types of income. So it could be by by creating non-passive losses from either business losses or renting out equipment. You may have heard of those strategies or other real estate loss generation strategies that result in non-passive losses or entity, anything that we do here, we can use those losses or business losses to offset the oil and gas profits. So you can offset the oil and gas profits with both passive losses and the non-passive losses. And then our charitable strategies are very popular, and advanced charitable strategies will also be very effective in offsetting the taxation on the money that comes in from oil and gas. So there are some neat ways that you can maybe completely eliminate the taxes on your oil and gas profits. But let's look at what we can do with stocks now. When it comes to taxes. Tax mitigation and tax reduction strategies available for you when you're investing in stocks and see capital gains, we're going to see a whole world of opportunities. Because long-term capital gain events or large capital gain events oftentimes are going to be the most transformative events in peep in certain high-income earners' lives. You've seen people when they exit out of their companies and have multi-billion dollars of profits, or maybe even small business owners and they finally sell out of their business, they have large capital gain events, and there are all sorts of advanced ways, whether it's from the sale of your business or capital gains from your stocks, where you can utilize trusts and loss harving strategies. You can net other capital losses against your profits, you can harvest capital losses, you can buy tax credits. There are all sorts of sophisticated vehicles that allow you to time when you're paying taxes on it that can greatly reduce or eliminate the taxes entirely. One strategy that is going to be really, really exciting for me is using qualified opportunity zone funds. They were starting to kind of fade out, but with the one big beautiful bill, now we can defer the taxes for five years and reduce how much taxes is recognized with a step-up basis from OZs. And then there's all these advanced strategies integrated with those OZs, the qualified opportunity zone funds. Not only are we deferring and reducing the taxes from those capital gain events, but we can also eliminate the future gains that we've invested into the OZs. So we can use these capital gain events to give us access to these tax advantage qualified opportunity zone funds that defer and reduce our taxes and give us access to an investment that is going to grow year after year, and you'll never pay taxes on the exit. So you now can put money into the tax-free bucket. I mean, how exciting is that? For those of you looking to build wealth, this is not something you want to sleep on. You definitely want to make sure you're planning and considering this in the mix. Other ways that we can do this are again, there are some advanced charitable strategies with trusts that allow us to get immediate deductions. There are, and then of course, we can invest within our retirement accounts. You can invest within your Roth IRA and never pay taxes on the profits in your Roth IRA. You could also invest within life insurance policy. So another strategy available for the affluent is to invest within a life insurance policy where it grows and accumulates within that policy, you never pay taxes and you just borrow from it or you use the wealth generated from it as your death benefit. Also, really powerful for estate planning there. So while there are really exciting ways that we can mitigate our profits from the oil and gas, and if you have unused passive losses from that real estate, you may find that this is an incredible way to unlock that and eliminate the tax from oil and gas. When it comes to capital gain events within the stocks, there are some huge opportunities that are just incredibly powerful. And there's a large there's a greater variety of strategies available in that area. Now let's talk about some advanced tax strategies that we can use with either stocks or oil and gas investing. When it comes to advanced tax strategies in the in the forms of oil and gas investing in stocks, we can think about the timing of the income. Well, with stocks, it's really easy to time it because you can time when you want to sell the oil and gas. Sorry, when you want to sell the stocks. Let me say that again. Hopefully, my editor picked that up. When it comes to timing of timing strategies and your ability to be flexible and move that income into the years that are most favorable tax-wise, when you're investing in stocks, you choose when are you going to sell the stocks and pay taxes on the profits. Now, with oil and gas, your money's locked in there. So you have less control over the timing. And what you're gonna find is so many strategies are really just complex ways of timing when we pay taxes. And you may find that with with the ability to time when you pay taxes on your stocks, you can move those capital gains out and wait until you are in a more favorable spot where you have losses to offset the cap gains, or maybe you're gonna have rep status, real estate professional, and you can complete drive yourself into a zero dollar tax bracket, and the first$90,000 of cap gains are untaxed. So there's so many ways you can time this to optimize your tax situation. And again, with oil and gas, it's already determined by a third party. When are they gonna release the profits? When are you gonna be taxed? You have very little control and impact over the timing of when the money hits your account, and that gives you less flexibility over advanced strategies with timing. But there are some really neat things with oil and gas. Let's talk about um how we can use this with timing within a retirement account. There are ways you can invest into oil and gas within your retirement account that actually reduces the taxes when you want to pull it into a Roth IRA. And you can't do this with stocks. So if you think about this for a second, it would you rather have someone give you$10,000 of an oil and gas investment or$10,000 worth of cash? Which one is worth more? Well, it's gonna be the cash because we know we can we can sell it right away. We could do whatever sorry, we're not gonna sell it right away. We know that we can use it right away. We're we if we wanna, but at the same time, this oil and gas investment has to mature, we have to wait, and we don't have as could much control over the asset. So$100,000 of cash is worth a little more than$100,000 of oil and gas. So when you put oil and gas into a retirement account, and at certain points, especially when they're investing and they're drilling into the oil, the value of the asset inside your retirement account will drop because of lack of marketability, lack of control over the asset, and lack of liquidity. It is less value than just having cash or stock that you can sell right away in that retirement account. And because it's less valuable, now you can roll a portion of that asset into a Roth IRA. And what we've seen in this model where we use oil and gas to reduce the taxes on roll on rolling the money from a 401k to a Roth, we see it reduced anywhere from I've seen it anywhere from 25 to 60 percent. Now, 60% is very aggressive, and the folks who are doing this, I didn't recommend them by the way, and I would the IRS may challenge them. So, a more reasonable amount that we see though is around 25 to 30 percent reduction in the taxes. So if you want to move$100,000 from a 401k into a Roth, one way to do it is you put the money into the oil and gas, and then you move it into the Roth and you work the right professionals who understand this and you move it at the right time. And now you may find that you pay taxes on anywhere from$60,000 to$70,000 of what you put in, and then it grows because you're gonna get profits from the oil and gas. It's gonna grow, and the profits will be completely untaxed because it's now in that tax-free Roth. Now, when you can also obviously invest in, as I said earlier, in stocks within your your Roth IRA. You can use oil and gas as discussed earlier to offset a Roth conversion. And some other unique things that are available for both gas and stocks is gifting. When we gift assets, we can shift the tax treatment of the profits into lower brackets. So if we want to potentially gift, and this could be part of estate planning as well, we wanted to gift stock to maybe a non-chip profit organization. That's a popular way to get a deduction that's greater than the cost. So you buy a stock for$100, it's worth$200. When you gift it, you get a$200 tax deduction. Or you can gift that stock to a relative who's in a lower capital gains bracket or a$0 capital gains bracket, and they will then pay taxes at their capital gains bracket. Now beware of the kitty tax. If you do this to children, you may actually find this tax at your own rate. Now, you can also, if you here's an advanced way of gifting with oil and gas. Let's say you want to gift money to your your mom to help her pay for whatever. You buy oil and gas shares, you get the tax deduction in year one, and then you gift the shares to your mom who you want to support. You've already seen the tax deductions, and now when the money comes in and is taxable, it's gonna be taxed at your mom's rate. So she's gonna collect the cash and she's gonna pay taxes at her rate, which could be lower. Really exciting and cool stuff here. Now, I've just thrown a lot at you, and I know that you're, you know, if you're especially if you're not a veteran tax professional, you might be scratching your head a little bit, you may be a little overwhelmed, or you may be thinking, I want all this, I want this advantage and that, I want the OZs, I want to put the money into the tax-free bucket, but I want to reduce my taxes now. Well, how can we get the best of both worlds? Here's one thing you could do you could put money into the stock market, and then you can borrow against that money, and you the interest rate's relatively low, and you can put that money into oil and gas. So let's say I want to put I have you know a million dollars in the stock market, I can borrow$50,000 against that stock, and I could put that into oil and gas, and maybe I'll get a tax deduction of$40,000 to$45,000. How awesome is that? And you also, there's a good chance you're gonna want to consider both strategies if you're a high-income earner. And what we typically see people recommend if we want to diversify anywhere from 5% on a more conservative level, because oil and gas is a more aggressive and risky investment. So 5% all the way up to 15% recommended as the makeup of your assets invested into oil and gas. While you may find it to be okay to put all of your money into an index fund, which is a relatively conservative and liquid asset, and a common way to put your money into your to to store your wealth and grow your wealth, you wouldn't want to put all your money into the oil and gas because you're just gonna have a little bit too much volatility here. So a five to 15% of your portfolio in oil and gas is typically what we see wealth advisors and and thought leaders recommend if you want to diversify into this strategy. And if you have, by the way, if you have all your money just in in stock markets and ETFs or index funds, and you're a high incomer and you have over a million in assets, maybe you should start talking to some other tax planners and wealth advisors or talk to us on some other tax-efficient vehicles we can put our money into here. Now, when it comes to what is best, think about this, right? There's all these different scenarios we've discussed, all of these different factors, right? Your initial savings, oil and gas is gonna give you an immediate tax reduction, and that frees you up more capital to do more exciting things with. But when it comes to the taxes on the money that comes in from long, either dividends, long-term capital gains, compared to the oil and gas, the stock portfolio is gonna have that advantage. Besides the fact we have the flexibility to create that long-term cap gains, you have the liquidity that you could sell at any time and you could borrow against it compared to the oil and gas, where your money is gonna be in that partnership and you are gonna await your distributions. And there are ways to mitigate both oil and gas in stocks, and depending on your scenario, you may find one more valuable than the other, but we are gonna find more opportunities to mitigate our stock portfolio profits than oil and gas. And those profits are taxed less than oil and then oil and gas. The stock market is gonna produce more tax-efficient profitability for the most part. And the stack the tax strategies see there, there are greater tax strategies to available to mitigate the uh the stock investments, but there are also some very exciting ways we can use oil and gas, and some exciting ways when you are resourceful and knowledgeable and strategic and working with a skilled tax advisor that oil and gas can really fit in the picture and create incredible wealth and tax advantage assets and tax reduction. How do we make sense of what is best for you and what is best for you now and where you're gonna put in your next dollar? If you want greater liquidity, stocks are the way to go. If you want immediate savings, oil and gas. If you want less taxes on the profitability, the stocks are gonna be the more effective way to do that. And if you want to be able to use your losses from real estate to offset it, maybe you turn you decide to go with oil and gas. There are less aggressive strategies, or you want to have something that's a little more reliable and less risky, then maybe the stocks are the way to go. But if you need that immediate tax savings, the oil and gas may be the best option for you because maybe you're in a high bracket, or maybe you want to have additional liquidity from the tax savings. So there are so many different features to evaluate. And the answer to you is really based on your situation. When you look at all these variables, what are the other things we're looking at here? How are we reducing our taxes and how are we building wealth? And what are our goals? And there's no right or wrong answer of oil and gas versus stock investing, but it is what you want to do here is make sure you understand all these different variables to make the decision that's best for you. I really hope you enjoyed this conversation. And again, if you want a more detailed look into how these types of investments are gonna impact you from a tax perspective and any other advanced tax reduction strategies, go to prosperalcpa.com slash apply. We're gonna fill out a quick survey and talk to someone on our team, and I will personally send you a video illustrating how this may come together for you and any other questions you may have on taxes. All right, happy tax savings. Stay tuned. We have a lot more great content coming your way.