Huge Tax Deduction + Monthly Income

Natural gas is rapidly gaining popularity as an alternative source of fuel. The tax deduction provided to those who participate with its exploration and mining is huge.

Plus, it provides the investor with an outstanding source of tax-favored monthly passive income that can last for years.

Here's an example of how these publicly offered programs can work.  The minimum investment is $5,000 for qualified buyers.

Keep in mind that you must have a current prospectus and be eligible to participate before investing.  This explanation is for information only.

About 89.5% of your purchase price is federal income tax deductible... so, if you invest $5,000, the deduction would be $4,475 ($5,000 times 89.5 percent).

Using a hypothetical 25% federal income tax rate, you would save $1,118.75 in income tax (4,475 times 25%).

In addition, most states that assess income tax permit a deduction.

The federal income tax deduction is only for the year in which you made the investment... similar to an IRA.

In about 6 to 9 months, you would begin to receive monthly income based on the price of natural gas that is being sold from your program's wells to the ultimate distributor sites.

To put this into perspective, in 2002 the average yield was 19.25 percent for one of the industry leaders. In other words, for every $5,000 invested, you would have made $962.50.

About 25 percent of the income is tax-free income and could theoretically last for 20 years... or until the wells run dry.

Bear in mind the income stream varies considerably due to supply versus demand and the severity of the weather.

Bitter winter months typically result in high demand and, therefore, higher prices.

More public utilities are using natural gas as a fuel source. And, natural gas has an excellent reputation due to its clean efficiency.

As with any investment, there are risks.  To take full advantage of the tax deduction an investor must agree to initially be a general partner in the program for about 6 months.

This assumes more risk than being a limited partner. To compensate for this added risk, the company typically will carry a large amount of liability insurance, as well as pledging its entire net worth against such risk.

So... is it worth the risk to reap such a reward?  Historical performance would seem to indicate so.  When these investment programs hit the market, they typically sell out rapidly.

But, in the final analysis, you're the one who needs to sleep soundly every night.

Combine All 3 Investments For Maximum Benefit

• Purchase the affordable housing tax credit program:

This provides many years of tax credits, plus it generates monthly passive income, which is 25 percent tax-free.

• Purchase the natural gas program explained here:

This provides a huge one-time tax deduction, plus it generates annual passive loss that can be used to offset the taxable portion of the passive income from the affordable housing investment.

• Purchase a tax-deferred annuity:

This should be funded initially with the money you save from the affordable housing program, plus the monthly passive income you get from the natural gas investment.