Opportunity Zones - The Basics

Congress recently passed the Tax Cuts & Jobs Act of 2017 which created Opportunity Zones.

The idea was to spur economic investment in what Congress determined were disadvantaged areas of the country. To incentivize investment they included incredible tax benefits, only for a limited time.

Opportunity zone investments are a preferred tool for investors who need to shelter capital gains from a real estate or business sale, we think though that all investors can benefit from OZ investments. Here are the highlights:

Defer Taxes

A major frustration when selling real estate or a business is the looming tax bill associated with a sudden windfall of cash.

Real estate investors have ways of deferring capital gains tax by finding a like property & utilizing a 1031 exchange. There's a time crunch though.

What about capital gains from a business sale? Or maybe after being a landlord you're not particularly excited about fielding tenant calls or the headaches of managing a rental.

Investing in an OZ fund will allow you to defer capital gains until 2026 & put that capital to work in cash flowing & appreciating real estate.

Grow Tax Free

Anyone growing their wealth knows that outside of a Roth account (where you invest post tax) they'll have to pay taxes when an asset is sold.

An additional benefit to OZ investing, the asset will appreciate in an OZ fund tax free.

This means after the life of the investment the profit from that investment is pocketed with IRS withholdings or a shocking tax bill.

Vintage OZ Fund

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Timeline:

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