Investors in Lynx Energy's programs may be eligible for certain tax benefits.  These include:

• Intangible Drilling Costs (IDC’s)
  IDC’s typically account for 70-80% of the cost of an oil or gas well.  For example, the cost of the hole in the ground constituting the well is an intangible drilling cost.  The total IDC is typically deductible from ordinary income in the year of the making of the investment.

• Percentage Depletion
  15% of the gross revenues from oil and gas production is deductible from cash distributions to investors.  This means that about 17-19% of distributions under this tax aspect are typically not subject to taxes.

• Depreciation Deductions
  The tangibles of an oil and gas investment, such as pump jacks and pipelines, are generally depreciated over seven years.  A portion of the cash distributions from a partnership represents depreciation and normally is not subject to taxes.  It is expected that depreciation would represent about 2-5% of cash distributions in the first 7 years of a partnership.

Please consult your tax professional for a complete description of potential tax benefits or to answer any questions.

Other Helpful Links:

Oil and Gas Terms and Definitions

Oil and Gas Tax Advantages

More about Oil and Gas Tax Advantages

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