Relationship disclosure. Advanta IRA is an independent third-party custodian and is not part of Kingdom Exploration. Advanta IRA does not provide investment advice and does not endorse, evaluate, or recommend any investment, including ours. Kingdom Exploration does not provide custodial, tax, or legal services. You are free to use any qualified self-directed custodian willing to hold an oil and gas working interest; we mention Advanta IRA because investors have used them. Any referral, marketing, or compensation arrangement between Kingdom Exploration and a custodian is disclosed in the offering documents provided to prospective investors — ask for it directly if it matters to your decision.

About Advanta IRA

Advanta IRA reports managing over $3.7 billion in client assets with an A+ BBB rating and 20+ years of experience. (Figures as published by Advanta IRA; we have not independently verified them.) Many Kingdom Exploration investors have chosen Advanta IRA as their custodian for self-directed retirement accounts.

Trust rates are compressed — "10–37%" is misleading shorthand

UBTI is taxed at the rate schedule for estates and trusts, not the individual schedule. Seeing "10–37%" suggests there is room at the bottom. There is almost none. For 2026 the schedule runs:

Source: IRS Rev. Proc. 2025-32, Table 5. Thresholds are adjusted annually. The practical point: an individual does not reach 37% until roughly $640,600 of taxable income in 2026, but a trust or IRA reaches it at $16,000. Any meaningful production income inside the account is likely taxed at or near the top rate.

What reduces UBTI (the part usually left out)

UBTI is a net figure, not gross revenue, and the same oil and gas deductions that make direct investment attractive generally apply inside the account when computing it:

• Percentage depletion and intangible drilling costs are deductions connected with the same activity and generally reduce the account's UBTI. In the early years, IDC deductions can offset a substantial portion of the account's unrelated business income.
• Operating expenses directly connected with the activity — lease operating expense, severance taxes, and similar costs — also reduce it.
• A $1,000 specific deduction is available in computing the tax.
• Losses may generally be carried forward, though the rules require unrelated trades or businesses to be computed separately.

The honest summary: UBTI is a real cost that erodes the tax-shelter advantage of holding a working interest in a retirement account, but it applies to net income after these deductions, not to gross checks. Have your CPA model it before you commit — do not rely on either the scary version or the rosy version.

The IRA must pay every expense of the investment from its own funds. That includes capital calls, its share of operating costs, the 990-T tax, custodian fees, and eventual plugging and abandonment (P&A) costs at the end of the well's life.

If you pay any of those personally, you have likely engaged in a prohibited transaction under IRC §4975. The consequence is not a small penalty: a prohibited transaction can disqualify the entire IRA, treating the whole account as distributed and taxable in that year — potentially with penalties, and on a balance far larger than the oil investment itself. Writing a personal check to cover an unexpected $8,000 cash call, to save an investment you believe in, is exactly how this happens.

Therefore: keep meaningful cash reserves inside the account. Do not invest the account down to a near-zero cash balance. Discuss a reserve amount with your custodian and CPA before funding, and ask the operator what future capital calls and P&A obligations are realistically expected. Related rules also bar the account from transacting with disqualified persons (you, your spouse, ancestors, descendants and their spouses, and entities they control) and from any personal benefit or use of the asset.