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Gold/Mining/Energy : Strictly: Drilling and oil-field services -- Ignore unavailable to you. Want to Upgrade?

To: dfloydr who wrote (47892)	7/13/1999 3:30:00 PM
From: double-plus-good	Read Replies (2) \| Respond to of 95453

DFR -- i believe the tax dodge with the two i mentioned may be different. did my research a while ago so i may be a little off, but the supposition was the CBM gas is recognized for tax purposes as an alternative energy, thus qualifying for special tax breaks. in the case of WTU the tax "rebate" actually exceeds the income distributions on a quarterly basis. for example, if the profit distribution per share for the quarter is .25 the tax benefit might be .30 cents. 1000 shares would then yield the holder $1000 annually and $1200 dollars of tax benefits. the tax benefits come right off the top of your taxes due -- NOT off of your income. so the total distribution is, in effect, $2200 dollars on a holding of 1000 shares. the asset is ever depleting, as you point out, and based on my calculations the total benefit of both tax benefits and profit distributions only narrowly exceeds the current share price, leaving little room for any meaningful appreciation. on the other hand if there was a spike in NG prices one would naturally expect that the profit distributions would increase along with the share price -- unless that is there is a long-term hedge in place. a lot of ifs in any decision to invest. i would be a buyer on a 10% dip due to temporary weakness in NG prices. there might then be some better chance of receiving appreciably more than you paid for the shares through distributions and the later selling of the trust shares . fwiw dpg