Advantages of Flow-Through Limited Partnerships
Potential for Capital Appreciation
Such partnerships will primarily invest in growth-oriented oil and natural gas companies.
Reduction of Current Taxable Income
In the case of CEE investments, the amount is invested generally 100% tax deductible against any source of income in the year the investment is made.
In the case of CDE investments, 30% of the investment is deductible against income in the year the investment is made and the remaining 70% is deductible on a declining balance basis in future years.
Take Advantage of Capital Loss Carry-Forwards
Capital loss carry-forwards may be used to offset capital gains realized on disposal of the units.
An investment in units of such partnerships will offer exposure to the energy industry through a diversified portfolio of flow-through shares of public and private issuers on a tax-advantaged basis.
An investor can manage his or her own risk exposure through the allocation of his or her investment between CDE and CEE units.