Benefits of Qualified Opportunity Zones

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!Qualified Opportunity Zone Funds—A Three-in-One Benefit  Qualified Opportunity Zone Funds(“QOFs) allow investors to invest and shelter capital gains by offering three distinct tax 

Benefits: 

• Pay Later
• Pay Less 
• Don’t Pay at All

To take advantage of these three benefits, a taxpayer needs to invest the capital gain generated from any asset sold into a QOF—generally within 180 days from the date the gain was triggered—and claim the QOF benefits on your tax return. 

Summary of Tax Benefits of QOF investment:

• Pay Later:  Defer paying tax on capital gains until April of 2027.

• Pay Less:  Reduce tax by 10% increase in basis for QOF investments made by December 31, 2021.  (Additionally, accelerated depreciation from Cost Segregation  should further reduce, if not eliminate, capital gains tax due in 2027 by providing offsetting passive activity losses generated by the depreciation). 

• Don't Pay At All:  Eliminate tax on QOF Assets sold more than 10 years after investing in the QOF.

Additionally:

• Unlike other real estate investments, there is NO TAX on depreciation recapture on QOF assets sold more than 10 years after investing in the QOF. (Even though QOF investors receive all the benefits of the depreciation deductions that apply to other real estate investments.)

• Upon stabilization of a project,  investors may receive tax free distributions from a cash-out refinance may result in partial return of capital. For GPWM Growth QOF investors during the QOF investment window, the refinance proceeds will be used to acquire additional QOF assets which will also grow tax free inside the QOF.