In this presentation Mark Moss explains how to evaluate tax‑driven investments by first stripping away any tax deductions and asking whether the deal would still be attractive on its own. He illustrates the principle with a detailed oil‑and‑gas case study where a promising exploration project ultimately failed to generate profit despite sizable tax write‑offs, showing that deductions cannot turn a bad investment into a good one. Moss then outlines his decision framework: ensure the investment pencils out without tax benefits, diversify exposure, and work only with proven operators. He contrasts oil‑and‑gas with other cash‑flow opportunities such as solar projects (which can provide guaranteed cash flow plus tax credits) and Bitcoin mining (where he values long‑term Bitcoin ownership over short‑term profitability). He warns that the IRS disapproves of investments made solely for tax avoidance and may invalidate such deductions. Finally, Moss promotes a free training session that walks participants through his system, asking attendees to bring last year’s tax bill and net‑worth after debt to personalize the analysis.
Chapters
A large tax deduction can make a deal look attractive before the investment itself has produced anything. Now, I used to give that tax benefit way too much weight. So now I separate it from the investment decision. Now, before I ever consider an investment like oil and gas, or any other tax-driven investment, I ask a simple question: would I still want to own it even without the deduction? Now, there are good deals, there are bad deals, there are good and bad oil deals, gas deals. I've done them. And the deduction may improve a good deal, but it can't make a bad deal Even better. Now, before we jump into it and I give you some good lessons, let me tell you how I've got these lessons to give you. So I've been investing a long time, over three decades. I've invested into all types of things, and I've invested into a lot of oil and gas deals. And I can tell you that some of them worked out, and a lot of them haven't. And so let me tell you about one deal. One deal I did—it was an extremely attractive deal. We had a new oil exploration project. All of the properties around us had already hit all the wells. All the reports came back. It was. Basically a slam dunk, right? All investments are before you make them. And so, you know, we invested a couple hundred thousand dollars into this deal. Now, the beautiful thing about the oil and gas industry is that I get deductions for those things. And so I got immediate write-offs on my taxes. And that was immediate money that I saved. It was money I would have spent to the government. And now I got to keep some of it. And that was great. But the problem is, is that then the investment itself was also supposed to give me a return. And what happened is that the project actually worked out pretty good. We actually did find the oil. But the problem is that the oil market changed. We started seeing new technology come onto the market. We started seeing a lot of fracking happening. Stuff started shift— shifting down into Texas. We were up in like North Dakota. The pipelines and, and the ability to get the oil onto the market didn't really get developed the way that we thought it would, and it changed the profitability of the project. And so even though we hit the oil, we weren't able to get it to market efficiently, and that changed the entire dynamics of the project. Now, I still own that project today. I was hoping to get my money back like 6 or 7 years ago. And I still own the asset today, but it doesn't make me any money. And the chance of it ever making me any money are at this point, probably slim to none. So even though it worked out and we hit the oil, it still wasn't profitable. And even though I did get some tax deduction, which helped offset some of that immediately, overall, it was a terrible investment. So rule number 1 is what does the deduction actually change in my investment? Right? So an example is that $100,000 investment into an oil and gas deal could save me $30,000 in taxes. That's great. But there's still $70,000 at risk. The deduction itself doesn't make a bad investment good. It could improve the investment a little bit. But what I've had to learn the hard way, I learned this mostly from real estate, is that we make our money when we buy, not when we sell. So we want to make sure that it pencils out. It's a good investment with or without the deduction. It can't be solely dependent on that. The asset investment itself has to be able to stand on its own. So the thing with oil and gas is that They're exploration plays typically. And so you're always sort of at the mercy of what's under the ground and what the market will, will pay. The price of oil varies quite a bit. As you can see right now, we're over $100 a barrel. Typically over the last couple decades, we've been in the $60 to $80 range. And so the price can swing, it can vary wildly. You know, under the Biden administration, they were very aggressive to oil and gas, shutting down leases, making it very difficult, very expensive to get the oil to market. So there's a lot of things that can go on. So in oil and gas specifically, You have to understand the dynamics of that. So I think a couple of things that are important to you. Number one, if you only have one in your portfolio, you're at a lot of risk. You might want to diversify that risk and have a little bit of a portfolio of those. But then more importantly, how do I think about it is that the investment itself, I need to have a proven operator, somebody who's proven to be able to find the oil, produce the oil, and make a profit. I need to make sure that the return, even without the tax deduction, is good enough to make that decision on its own. Now it can improve that. So let's say that I'm projecting to make, let's say, a 12% return. And that 12% return is great. And I add the tax deduction on and it brings it to, let's say, a 15% or 18% return. Okay, well, that improved the deal. But the deal wasn't made solely off of that. There's another reason why that's important. The IRS specifically does not like it if you're only investing to get out of taxes. If that is your only goal is to evade taxes, a lot of times they can actually void or veto those deductions. And so you want to make sure it's a good deal, the deal pencils out, and you're not only doing it for tax deduction. Now, as I said, the deduction should help You know, help improve the numbers, but it can't make or break the deal. So we wanna make sure that it, like I said, sweetens the numbers. Now, for me, I would like to invest into things that I would already like to own. I believe over a long period of time, the debasement machine is gonna do its work and it's gonna drive assets continued up and to the right, but not all assets. So for example, oil and gas, I already told you, they vary wildly. Over the last couple decades, oil's kind of stuck at the $60 to $80 per barrel price. So there's not a huge amount of upside in there. Versus something else. For example, I could get into a solar deal and I could sell that solar system to a commercial operator, and that could be a guaranteed amount of cash flows. That could be a cash flow play that could work. And then the tax credits help sweeten that deal, give me a little bit more cash flow. Or I like to invest into Bitcoin mining operations. And while the profitability of the Bitcoin miners do go up and down, I want to hold Bitcoin for the long run. So even if I acquire some of my Bitcoin at a low profitability or a loss, that's okay because I ultimately want to own the Bitcoin. And so the numbers work out for me on paper. If they don't work out, I still want to hold the Bitcoin. And the tax deduction just adds the sweetener on top of that. We want to think about all of those factors together. What is my total return? Is it an asset that I believe in long term? And can the deduction help increase the deal? Okay, so lining up the options is, is kind of the easy part. There's, there's a lot of deals out there. But knowing The one that you should choose. Knowing what original dollar actually creates in each of them, that's the hard part. It gets a little tricky, right? That's the number that a tax deduction can't answer for you. Now, I put together a free training and it's going to walk you through the entire system that I use to run on my own balance sheet. And it helps me answer these types of questions. Now, the next session is just a few days away. If you bring 2 numbers with you, I'm going to help you figure this out for yourself. The 2 numbers are last year's tax bill and your net worth after debt. So bring those, save your seat. I'll put a link down below. I have a QR code on the screen right here, and I'll see you over there.
