Self-Directed IRAs
When holding energy in a self-directed IRA makes sense, and when using money outside your IRA keeps more of the benefit, including the year-one deduction on a project’s drilling costs.
- Know what a self-directed IRA can hold
- Understand the tax that can apply inside the account
- Choose the route that keeps the deductions
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Your retirement account, your choices
A self-directed IRA is a retirement account held by a specialist custodian that lets you choose assets beyond stocks and funds, including real estate and oil and gas interests.
The account owns the asset, not you. Income goes back into the account and grows tax-deferred, and you can’t personally use or benefit from what the account owns until you take money out.
IRA money or outside money?
For a working interest, the biggest benefit is the year-one drilling deduction against your salary. Inside an IRA, that benefit largely disappears. Either way, every project is underwritten toward Summit’s 3–5x target.
When an IRA can still fit
- Most of your savings are in retirement accountsIf you have little cash outside your IRA, it may be the only practical route.
- The interest doesn’t create business incomeRoyalty-type interests are usually a cleaner fit for an IRA than working interests.
- You don’t need the deductionIf tax savings this year aren’t the goal, the IRA’s tax-deferred growth may matter more.
Talk to your custodian and CPA before deciding.
The Investor Kit
Everything in one place to help you decide whether direct oil and gas ownership is right for you: how Summit works, how the joint venture structure works, and what to expect from start to finish.
Accredited participants who request it also receive
- A private strategy call with our team
- Access to our full library of guides
- Information on current projects, once accredited status is verified
