Qualified Opportunity Zone Funds - Could These Benefit You?

With the passing of the Tax Cut and Jobs Act in 2017, Qualified Opportunity Zones were created to help economic development and job creation in distressed communities throughout the country.

Taxpayers can benefit by deferring tax on eligible capital gains as long it is invested in an appropriate Qualified Opportunity Zone Fund (QOZF) and meets other requirements.

• When investing in a QOZF, the individual is required to reinvest the capital gains received from the disposal of an asset within 180 days of the date of disposition.
• The taxpayer will in turn receive stock from a corporation or a partnership interest in that QOZF.
• The investment can be sold at any time, and the deferred gain will have to be recognized in the year of sale.
• However, if the investment is held for a certain amount of years, the taxpayer could potentially exclude up to 15% of the original gain in the year sold.

Anyone can invest in a QOZF, but it would be more beneficial for taxpayers who have high capital gains each year and are looking for a long-term investment. It could also be beneficial for taxpayers who have seen an unexpectedly larger increase in income that isn’t expected to continue going forward.

If this opportunity is something that you are interested in and you would like more information on the subject, please reach out to a member of our team.

Contributing Author:

Brandon Broeckelman | Email Brandon has been part of the SGA team since September 2018 and focuses on tax planning and preparation. He earned two degrees from Fort Hays State University: a Bachelor of Business Administration in 2015 and a Master of Business Administration with a concentration in accounting in 2016. In his free time, Brandon enjoys staying active, participating in and watching sports, and spending time with family and friends.