Originally Posted by KC native
Yes, the success rate is terrible on new holes. The LP allows all the expenses to pass through to the investors. They do this with real estate a lot as well.
But what is the point of intentionally losing money for a tax advantage. You don't get a dollar for dollar reduction in your income taxes... For every dollar loss that offsets a dollar of income, you save, say, 40 or so cents in taxes. Why lose a buck to save 40 cents?
I never could quite follow that part of tax shelters, but obviously the math must work somehow since I guess people do intentionally do that kind of thing.