Business: Texas-Size Tax Dodges

eral Texas oil companies may have discovered a clever new way of saving millions of dollars in taxes on their gushers. The scheme involves transferring the ownership of old oil and gas wells to trusts that are held directly by the company's shareholders rather than by the firm itself. The advantage of the transfer is that company profits are normally taxed twice: first as earnings of the firm and then as dividends to individual shareholders. But payouts from trust funds are taxed only as personal income to the recipients, thus eliminating any corporate levy.

Mesa Petroleum of Amarillo last year put 55%...

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