Oil & Gas vs. Every Alternative: After-Tax Returns Compared
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Investor Tool
Investment Comparison
See how direct oil and gas participation compares to stocks, bonds, and real estate.
Compare Investments→Here's What You Need to Know
- /Oil & gas is the only asset class that gives you a 75% Year-1 IDC deduction against ordinary income.
- /The S&P 500 and REITs beat bonds on returns, but neither one hands you a Year-1 tax event like this.
- /Munis are tax-exempt, sure. But they yield significantly less than an oil & gas working interest.
How the Comparison Works
One dollar, five different ways. This tool stacks oil & gas working interest next to the S&P 500, REITs, municipal bonds, and corporate bonds, all after-tax at your marginal rate. Adjust your bracket and time horizon to see how the numbers shift.
Dig into why direct oil and gas participation stands apart in our complete investment guide, or explore the tax deductions that drive the after-tax difference. View our current drilling projects to see available opportunities.
Cumulative After-Tax Wealth Growth: $100,000 Invested
The IDC Deduction: Oil & Gas's Decisive Advantage
In Year 1, accredited investors in direct oil & gas working interests can deduct 60–85% of their capital as Intangible Drilling Costs, reducing effective capital at risk before the well produces a single barrel.
| Asset Class | Pre-Tax Return | IDC Deduction | Yr-1 Tax Saved | After-Tax Return | 5-Yr Wealth | Liquidity | Income Type | Market Corr. |
|---|---|---|---|---|---|---|---|---|
Oil & Gas Working Interest BassEXP Direct Participation | +22.0% | $75,000 (75%) | $27,750 | +95.4% | $168,923 | Active + Production | Low | |
S&P 500 Index Fund Broad Market Equity | +10.5% | None | — | +46.9% | $146,940 | Capital Gains | High | |
Real Estate (REIT) Public Equity REIT | +8.0% | None | — | +27.9% | $127,871 | Ordinary Dividends | Medium | |
Municipal Bonds Tax-Exempt Fixed Income | +3.8% | None | — | +20.5% | $120,500 | Tax-Exempt Interest | Low | |
Corporate Bonds Investment Grade Fixed Income | +5.2% | None | — | +17.5% | $117,489 | Interest Income | Low |
Key Attributes at a Glance
Oil & Gas
S&P 500
REIT
Muni Bonds
Corp Bonds
Illustrative, not a projection: This tool uses generalized industry assumptions to show how the asset class and federal tax code work in general terms. Outputs are not projections for any specific BassEXP offering. Individual results vary significantly with well performance, commodity prices, and program structure, and are not guaranteed. Past performance is not indicative of future results. Consult a qualified CPA or financial advisor for advice specific to your situation.
Model assumptions: O&G: 75% IDC share, 15% percentage depletion, 18% Year-1 yield, 35% hyperbolic decline (b=1.2). S&P 500: 10.5% gross return, 20% LTCG at sale. Muni Bond: 3.8% tax-exempt. REIT: 8% gross return, 20% QBI. Corporate Bond: 5.2% ordinary income. All figures nominal, pre-inflation. Oil and gas investing carries risk of total loss.
See How Oil & Gas Fits Your Portfolio
Let's talk about current working interest opportunities and how the IDC deduction can cut your tax bill this year.
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