If You're Paying 40% to Taxes, Here's How to Take It Back.

Hi ,

I’ve spent most of my investing career looking for one thing: conviction with a backstop.

Every year, high earners regularly give over 40% of their working hours to taxes.
That’s over four months of the year, traded for priorities you don’t own.

Hours that could go toward your family, your freedom, or the projects that matter most.

When you don’t design your financial life, the system does it for you.. And the system’s default setting is: work half the year for the government, then invest what’s left into assets you don’t control.

The wealthy read that equation differently. The U.S. tax code spans about 2,600 pages, but when you add Treasury regulations and IRS guidance that interpret it, it stretches beyond 70,000 hard return.
The first few pages explain how to pay taxes. The rest outline how to keep what you earn.

The wealthy view those pages as a roadmap for investing capital into infrastructure and real assets that move the country forward.

Lowering taxes through investing isn’t cheating, it’s capitalism working as intended. It’s private investment into public progress.  Just look at the U.S. tax code’s energy incentives. For decades, oil and gas projects have offered one of the few legal ways to offset active income while generating real cash flow. Those same provisions—created to secure America’s energy independence—now serve as one of the most efficient tools for reclaiming both time and capital.

This week we explore how to reclaim it all - your time, convert tax drag into ownership, and reinvest that 40% into productive assets that generate both yield and freedom.

In This Issue:

• Shift Your Stack: The most efficient tax shield for active income also multiplies your investment with fast return of capital and solid ongoing cash flow. 🤯

• Case Study: How our new partner helped investors save $17M while doubling their money.

• Playbook: The step-by-step framework for investing in Oil & Gas to leverage structure, timing, and IDCs.

This issue is about turning fossil fuel into financial fuel.

Let’s dive in.

— Walker Deibel
WSJ & USA Today Bestselling Author of Buy Then Build
Founder, Build Wealth

P.S. We’re launching BuildEnergy Fund II later this week. It targets an 80–90% first-year write-off on active income earned in 2025, a return of capital in 24–30 months, and a 2–3×+ projected ROI over seven years.

If you’d like me to send you the link to the data room the moment it opens, reply to this email with the word “TAXES.”

SHIFT YOUR STACK

The Most Efficient Tax Shield for Active Income

When the world screams renewables, the smart money quietly buys cash flow in oil.

Every year, high earners repeat the same cycle: income climbs, taxes follow, and a large share of effort vanishes into the government’s pocket. They’re rewarded for producing value, then penalized for success.

The wealthy don’t accept that equation. They plan for taxes with the same intention they plan for growth.

Oil and gas is more than an energy investment — it’s one of the most powerful, legal ways to convert taxes into ownership. The U.S. tax code was built to reward domestic energy production, and investors who fund that effort receive extraordinary incentives in return.

When you participate directly in a drilling program through a working interest, the tax rules allow you to deduct a large portion of your investment against active income in the same year. 

This unique treatment comes from two core provisions:

• Section 263(c) and its Treas. Reg. 1.612-4, which define and permit the immediate deduction of Intangible Drilling Costs (IDCs)—expenses like wages, fuel, and materials used in drilling with no salvage value.
  

• Section 469(c)(3), which states that a working interest in oil or gas isn’t treated as a passive activity if the investor’s liability isn’t limited. That’s what allows qualified participants to apply those deductions to active income rather than just passive gains.
  

IDCs usually account for 60 – 80% of a project’s total cost (sometimes higher depending on the operator’s structure). A $500,000 investment with 85% IDCs would generate a $425,000 deduction. At a 37% federal rate, that’s $157,250 in immediate tax savings, lowering the after-tax cost of ownership to roughly $343,000.

Note: authoritative CPA sources typically cite 60 – 80% as the usual range. Some programs reach 85% or more; confirm each offering’s IDC/TDC allocation in its PPM and sample K-1.

The remaining spend, Tangible Drilling Costs (TDCs)—equipment with salvage value—is depreciated over seven years under standard MACRS schedules.

This mechanism isn’t new or experimental. The IDC election has existed for decades and is outlined in the IRS Oil & Gas Audit Technique Guide and reinforced through consistent policy designed to maintain U.S. energy independence.

The result is rare alignment: investors fund domestic production while the government subsidizes part of the cost through the tax code.

That single tax shield lifts an investor’s effective return by more than 45%, without additional leverage or risk. The IRS effectively funds one-third of the entry price, while the investor keeps 100% of the upside.

Compared with other tax strategies, the distinction is clear:

• Cost segregation & bonus depreciation: powerful for real estate, but typically front-loads only 20 – 30% of basis in year one after the phase-down of 100% bonus depreciation.
  

• QSBS (Section 1202): can exclude capital gains entirely but requires a five-year hold and only applies to stock gains—not current income.
  

• Conservation easements: legitimate in narrow use cases but now designated as “listed transactions,” facing elevated IRS scrutiny and audit risk.

Energy participation delivers immediate deductions, continued depreciation on equipment, and cash flow from production—all while directly reducing taxable income today.

Plus, even non-working interest oil and gas investments benefit from an annual depletion allowance which offset the first 15% of your returns each year for the life of the fund. 

A single well-structured oil and gas investment can transform tax season from a liability event into a capital-allocation decision. Instead of paying the IRS, investors redirect those same dollars into hard assets that generate cash flow and appreciate.

This is why oil and gas remains a staple in high-net-worth and family-office portfolios. It accelerates wealth by neutralizing one of the largest drags on compounding: taxes.

For investors seeking yield, efficiency, and asymmetric upside, energy stands apart as the rare asset that turns tax burdens into ownership stakes. It’s owning the wellhead instead of paying the bill.

We compiled the latest data and tax-code analysis in our new report, Tax-Efficient Energy Investment Strategies — a deep dive into how U.S. energy incentives and global demand create the single most efficient tax shield for active income. 

Read the full report HERE.

CASE STUDY

The Billion-Dollar IRS Mission

When Courtney Moeller talks about oil and gas, she’s describing a strategy rooted in purpose. Her goal is simple:

“I want to keep a billion dollars out of the hands of the IRS.”

It’s bold. But that’s who Moeller is. She grew up in Midland, Texas, the center of the Permian Basin. Her father was a petroleum engineer who drilled wells from Abu Dhabi to Jakarta. When he passed in 2011, she inherited his company and quickly learned the business from the ground up. Prior to that, she was a nurse preparing to become a physician assistant.

After a speaking invitation alongside Rich Dad, Poor Dad author Robert Kiyosaki, she discovered syndication and realized investors could pool capital to buy assets. “I thought I’d syndicate real estate,” she said, “but I didn’t know what a cap rate was. What I did know was oil and gas — and how to save people taxes.”

The experience of taking on her father’s business became the inspiration for the founding of Iron Horse Energy Funds, a platform that gives accredited investors access to institutional-grade energy projects with exceptional tax efficiency.

In 2023 alone, she helped investors save over $17 million in taxes.

The Strategy She Built

Iron Horse focuses on non-operating working interests in wells drilled by major operators such as Exxon and EOG, primarily in Tier 1 basins like the Bakken, Permian, and Eagle Ford. These positions typically represent 2–5% ownership slices in wells drilled by public majors, combining institutional infrastructure with private investor access.

Investors participate as general partners for tax purposes, which qualifies their share of income as active under § 469(c)(3). After the first year, they convert to limited partners while retaining their ownership stake.

When investing in oil and gas drilling, costs are split into two categories. It’s why it’s so tax efficient. About 80 to 90% are first-year deductions through Intangible Drilling Costs (IDCs), think labor, site work, etc. The rest are Tangible Drilling Costs (TDCs) such as equipment which depreciate over seven years, providing ongoing tax benefit. 

“It’s fuel, labor, and materials that are consumed in the drilling process,” Moeller explained. “Those are the biggest line items, and that’s why the write-offs are so powerful.”

Take her client’s results :

• A $7.5 million Colorado fund kept $6.3 million in the hands of her investors.

• A $5 million project preserved another $4.135 million.

Collectively, her programs have shielded $17.478 million in taxable income so far, all within compliant IRS-recognized structures.

One investor’s experience perfectly illustrates the model. 

A $100,000 allocation produced an 83% K-1 loss, reducing her tax bill by about $31,000 in the first year. She has since reinvested in four projects, committing $500,000 in total and saving an estimated $400,000 in cumulative taxes, with projected 2 to 3 times returns over seven years.

Moeller’s newest vehicle targets a $100 million raise with approximately 85% average first-year deductions. The fund’s first acquisition already projects 92% due to favorable purchase terms.

“When people realize they can offset W-2 income just by investing,” she said, “it changes everything. You don’t have to spend 750 hours trying to qualify as a real-estate professional. You can invest, earn cash flow, and keep more of what you make.”

Why It Works

Oil underpins the modern economy. It’s in the roads we drive, the phones we hold, and the medical equipment that sustains life. Recognizing this, the government created incentives more than a century ago to ensure domestic production. Those incentives remain in place, rewarding investors who fund energy development through generous deductions and ongoing depletion allowances.

That alignment between policy and production makes oil and gas the most efficient tax shield for active income — a structure where investors fund critical infrastructure, preserve wealth, and capture durable cash flow.

Courtney Moeller’s approach turns Intangible Drilling Costs into alpha, transforming a century-old tax code into a modern engine for wealth creation.

If you’d like to be notified when the fund opens, hit reply to this email with the word “TAXES,” or sign up for our Investor emails HERE.

THE PLAYBOOK

How to Invest in Oil & Gas Without Getting Burned

Every asset class has its own language.

In tech, it’s TAM and churn.
In real estate, cap rates and NOI.
In oil and gas, it’s PDP, PDNP, and PUD.

Understanding the language is the first step in truly understanding the strategy.

Energy remains one of the few markets where investors can still access income, tax efficiency, and hard-asset exposure in a single move.

Here’s how to approach it intelligently.

1. Qualify and Understand Your Exposure

To invest directly in energy funds like BuildEnergy Fund II, you must be an accredited investor under SEC guidelines. Most are business owners, executives, or professionals earning $300,000+ annually or holding over $1 million in investable net worth.

Energy projects vary by stage of production:

• PDP (Proven Developed Producing): Active, cash-flowing wells — predictable and yield-focused.

• PDNP (Proven Developed Non-Producing): Drilled but temporarily idle. Priced lower, moderate restart risk.

• PUD (Proven Undeveloped): Reserves proven but not yet drilled. Higher potential, greater execution risk.

The closer your exposure is to PDP, the steadier the return profile. As risk increases, the operator’s track record becomes essential.

2. Choose the Structure That Matches Your Objective

Your ownership type determines your role and how much you can deduct :

• Working Interest: You share both income and expenses. Qualifies for Intangible Drilling Cost (IDC) deductions under Treas. Reg. §1.612-4 and the §469(c)(3), letting you offset active income.

• Non-Working (Royalty) Interest: You earn a share of revenue without costs or deductions — a purely passive LP structure.

Funds like BuildEnergy Fund II use a GP-on-paper model to provide active-income eligibility, later converting investors to LP status for liability protection and ongoing distributions.

3. Time Capital for Tax Efficiency

IDC deductions apply to the year capital is deployed, not when wells begin producing.
That means to offset 2025 income, investors must participate before year-end 2025.

For example, BuildEnergy Fund II is structured for that window, with allocations open for roughly 30 days to ensure drilling and deductions occur within 2025.

For those planning ahead, this is preparation season — not filing season.

4. Balance Cash Flow and Tax Flow

Tax benefits are only the first layer of performance. Once wells are producing, investors earn quarterly distributions, and the first 15% of income qualifies for the depletion allowance, which is tax-free each year you own the wells.

That combination creates compounding across both tax and cash flows. Reduced liability up front and durable income over time.

5. Diversify by Vintage, Basin, and Operator

Professionals diversify exposure across vintages — different years, basins, and operators — to smooth commodity cycles and lock in pricing advantages.
A thoughtful approach might include:

• Two to four positions across funds or operators

• A mix of PDP wells for yield and selective PUD exposure for growth

• Four to six percent allocation per position

You don’t need dozens of deals. A few well-structured holdings in proven basins are enough to rebalance a portfolio and optimize after-tax performance.

6. Coordinate Your Advisory Team

Execution matters as much as structure.

Align your CPA, wealth advisor, and fund sponsor early to confirm how deductions are recognized and applied against the right income streams. Most accountants can file returns, but few specialize in private-market strategy.

7. Focus on the Objective

Oil and gas investing rewards precision over excitement. The goal is to use the right structure for the right outcome — whether that’s yield, tax efficiency, or diversification.

Our own energy funds demonstrate two different strategic frameworks:

BuildEnergy I is for investors seeking yield-focused exposure to U.S. energy assets. It emphasizes steady cash flow and appreciation without active-income deductions.

BuildEnergy II (launching this week) offers tax-driven exposure, targeting 80–90% first-year deductions through IDCs and related provisions. It’s designed for high-income earners looking to offset 2025 taxable income while maintaining energy cash flow.

• BuildEnergy I for compounding yield and long-term equity appreciation.
• BuildEnergy II for near-term tax efficiency and income optimization.

When executed with discipline, energy investing provides:

• Immediate, dollar-for-dollar tax reduction (Fund II)

• Consistent cash flow and asset-backed protection (Fund I)

• Uncorrelated performance to traditional markets

Buy cash flow, not cowboy dreams. 

WEALTH STACK REBELLION

Stop Hunting. Start Harvesting.

“We contend that for a nation to try to tax itself into prosperity is like a man standing in a bucket and trying to lift himself up by the handle.” -Winston S. Churchill

Every year, high earners surrender close to 40% of their working hours to the government.

That’s 40% of the time spent building, thinking, creating. Gone.

If you don’t take control of your financial journey, the default setting is simple: you work nearly half your year for someone else’s plan.

The wealthy see that cost differently. They treat the tax code as a roadmap, not a bill. They understand that policy signals where capital should go: toward energy, infrastructure, and production. And they play the game with intent. 

Invest in oil and gas to reduce your tax bill and make 2-3x+ returns?

Welcome to the rebellion.

Take back ownership of your time, output, and trajectory. The system rewards investors who deploy capital into productive assets and penalizes those who only earn and spend.

Rebelling means reframing what it means to “work.”
It means building structures that let your capital work as hard as you do.
It means converting hours into ownership, wages into wealth, and taxes into opportunity.

That’s the mindset shift every limited partner must make.
The goal is no longer to hunt for windfalls but to harvest durable wealth. To use proven ground, real assets, and the rules already written to your advantage.

The difference between investors and allocators is intention.

Private markets are where wealth stops leaking. Energy is perhaps the most visible proof.

You don’t have to trade half your life for taxes.
You can own the machine that buys your time back.

WHAT WE ARE READING

Diversified Energy and Carlyle Enter Strategic Partnership to Invest in Up to $2 Billion of PDP Energy Assets

Funding For Oil And Gas Industry Is Evolving Dramatically

Oil and Gas Market Update | Q2 2025

BuildEnergy Fund II opens later this week with a limited allocation. To receive priority access, reply and say “TAXES.” We’ll send details the moment allocations go live.