Tax Implications for Investors in the Era of Price Fluctuations
The current decline in oil prices is having a great many unexpected and unwanted consequences, many of which may turn into long-lasting troubles for the oil and gas industry − and especially for its investors, according to an article published by DLA Piper.
Michael A. Silva and Vince Slusher write that investors who own shares in companies and partnerships that are suffering from the hard times in the oil patch will face an ever-bigger headache thanks to the tax consequences of the price drop.
“The problem – essentially a situation that requires investors to book income for tax purposes and to pay hefty federal taxes even though they don’t actually receive any cash – is a direct result of the ongoing restructuring of the industry and its debt, triggered by the crash in oil prices,” Silva and Slusher write.