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How can I obtain Oil Pension Checks? I need to know the Best…

Customer Question
How can I obtain...

How can I obtain Oil Pension Checks?

Accountant's Assistant: The Accountant will know how to help. Please tell me more, so we can help you best.

I need to know the Best Oil Pension Companies.

Accountant's Assistant: Is there anything else the Accountant should be aware of?

JING sent me a message from Lombardi Publishing Corporation.

Submitted: 5 months ago.Category: Finance
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Answered in 1 hour by:
11/13/2017
Financial Professional: taxmanrog, Certified Public Accountant (CPA) replied 5 months ago
taxmanrog
taxmanrog, Certified Public Accountant (CPA)
Category: Finance
Satisfied Customers: 1,023
Experience: Licensed CPA, MA, MST with 31 years' experience. Teach Accounting and Tax courses at Masters level.
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Welcome to Just Answer! Thank you for giving me the opportunity to assist you! I will do my best to help!

Please give me a few minutes to type my answer.

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Financial Professional: taxmanrog, Certified Public Accountant (CPA) replied 5 months ago

What you are referring to is a scam. Well, not really a scam, but a trick to get you to subscribe to a newsletter. The "trick" that they are referring to - the "Oil Pension Check" - are really Publicly Traded Partnerships (PTPs). These PTPs in Oil and Gas typically pay out large amounts of their income as well as tax attributes. For tax purposes, these are usually treated as mostly nontaxable returns of capital. These reduce your basis, so that when you sell your PTP, you will have little or no basis, so the entire proceeds are gain.

However, you have to remember that these PTPs are an investment. Their value goes up and down. They are not for everyone. And they can go down in value, or have other tax attributes. In 2015 and 2016, one large PTP renegotiated its debt with its bondholders. The bondholders forgave huge amounts of the debts. Each of the PTP owners had cancellation of debt (COD) income that they paid tax on, yet they got no cash for it. I had one client who owned this PTP and his share of the COD income was over $18,000! So he paid over $6k in tax on income that he never received, the partnership had its debt forgiven, he got nothing.

As an investment, the amount of your quarterly "oil pension check" varies based on the amount you have invested. Currently they return 3% to 7% per year. That means that if you have $100,000 invested, you will receive $3,000 to $7,000 per year, or $750 to $1,750 per quarter. So it would take hundreds of thousands of dollars invested to get you the thousands of dollars each month that Lombardi and others (Agora publishing, Stansbury Press, etc) state you can earn.

Do not invest in these without consulting a Certified Financial Planner (not a stock broker - they will push anything on you). A CFP is licensed and ethically bound to give the proper investment advice to you.

So in short, there are no Oil Pension Companies. These are simply publicly traded partnerships. There are many tax implications for owning these. They do not return the amounts to a normal investor that these publications promote.

There is no such thing as a free lunch, as I am sure you have heard before. If it sounds too good to be true, it is. Just as this is too good to be true.

I hope this answers your question. If you have any more, please feel free to ask and I will be happy to answer.

Thanks! Have a great week!

Roger

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