What Is A Qualified Opportunity Zone? What They Are, Tax Benefits

What is a Qualified Opportunity Zone?

A Qualified Opportunity Zone (QOZ) is a designation created by the Tax Cuts and Jobs Act of 2017 to encourage investment in economically distressed communities. The program allows investors to defer and potentially reduce capital gains taxes by investing in Qualified Opportunity Zone Funds (QOZFs), which are investment vehicles that deploy capital into businesses or real estate projects located in designated Opportunity Zones.

Governors in each state nominated eligible census tracts, resulting in 8,764 designated Opportunity Zones across all 50 states, Washington D.C., and U.S. territories, home to more than 35 million Americans.

POTENTIAL TAX BENEFITS OF OPPORTUNITY ZONE INVESTING

To access the potential tax benefits of Qualified Opportunity Zones, accredited investors must invest capital gains into a Qualified Opportunity Fund within 180 days of realizing those gains.

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DEFERRAL OF CAPITAL GAINS TAXES OPPORTUNITY

Investors are able to defer paying federal capital gains taxes on their initial capital gains event until they pay taxes in 2027.

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NO TAXES ON ANY FUND PROFIT

After an investor holds their investment in an QOZF for 10 years, no federal capital gains taxes are due on any profits.

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POSSIBILITY OF NO DEPRECIATION RECAPTURE

Investors could benefit from any depreciation that occurs on the properties through pass-through losses.

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Eligible Gains

Opportunity Zone investments are available to investors with eligible capital gains from a wide range of sources:

Sale of Stock

Many of our investors have equity via their company stock options or are active investors in the stock market and experience capital gains event.

Sale of Business

Selling your share of a business makes you eligible to potentially defer your capital gains.

Sale of Property

Whether you sell your primary or investment property, investing into an OZ Fund is a great way to keep some of the equity and potentially avoid paying taxes on your capital gains.

Sale of Crypto

Selling cryptocurrency and realizing capital gains can qualify you for potential tax deferral by investing in an OZ Fund.

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Sale of Stock

Many of our investors have equity via their company stock options or are active investors in the stock market and experience capital gains event.

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Sale of Business

Selling your share of a business makes you eligible to potentially defer your capital gains.

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Sale of Property

Whether you sell your primary or investment property, investing into an OZ Fund is a great way to keep some of the equity and potentially avoid paying taxes on your capital gains.

The National Impact of Opportunity Zones

Since 2017, Opportunity Zones have become a consistent and measurable driver of development and housing production across the United States. The data shows a program that is delivering real results in communities that need it most.

600,000 Multifamily units completed in Opportunity Zones nationwide

205,000 Units currently under construction in OZs and DDAs

143,000 Units in the planned stage in OZ and DDA tracts

5%+ Of existing housing stock in designated areas represented by the active pipeline

12.7% Pipeline growth rate for fully affordable units — vs. 3.5% for market-rate

8,764 Designated Opportunity Zones across the U.S. and territories

Qualified Opportunity Zones