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Qualified Opportunity Zones: What Investors Should Know

VIEW PLANNING UPDATE (PDF)

SUMMARY

The Qualified Opportunity Zone program—created within the 2017 Tax Cuts and Jobs Act—provides a unique tax planning investment option for capital gains. When you invest your capital gains in an Opportunity Zone Fund, you defer taxes on the gains until 2026, you can potentially receive a step-up in basis up to 15%, and you do not pay tax on any appreciation in the fund investment. This planning update explains more about the program and provides examples of the tax savings available.

KEY TAKEAWAYS

  • The 2017 Tax Cuts and Jobs Act established the Qualified Opportunity Zone program to provide a tax incentive for private, long-term investment in economically distressed communities.
  • Investors in these programs are given an opportunity to defer and potentially reduce tax on recognized capital gains.
  • If you are facing significant tax payments as a result of capital gains, investing in a Qualified Opportunity Zone Fund may be worth exploring.