The Opportunity Zones Program was passed by Congress as part of The Tax Cuts and Jobs Act of 2017. It was created to provide tax incentives for those who participate in long-term private investment in designated underserved areas. Through investment in qualified opportunity zone funds, investors may help energize the economic development of low-income communities throughout the country while deferring and reducing their tax liability on certain gains. Maximum tax benefits require assets be held for at least 10 years.
The Opportunity Zones Program is designed to allow investors to defer and reduce capital gains in any asset class, not just real estate. By investing their realized capital gains into an opportunity zone fund, investors may defer their gains and receive a step-up in their basis over time. In addition, for opportunity zone fund investments held for at least 10 years, investors are not subject to federal income tax on any gains at disposition. It is estimated that among U.S. households, there is $3.8 trillion dollars in unrealized gains in stocks and mutual funds alone (1). Now it is possible for an investor to liquidate those investments and invest any portion of their capital gains into a qualified opportunity zone fund to defer and ultimately reduce their capital gains taxes.
(2) Investors should consult with a qualified tax consultant to investing in an opportunity zone fund.
(3) Investing in opportunity zone funds involves risk and you may lose money.
(4) Opportunity Zone funds have additional specific risks which may include investing in economically distressed areas, possible tax law changes, significant investment period to maximize tax benefits and illiquidity. Carefully review offering documents prior to investing.
For more information on The Opportunity Zones, please call our Internal Sales Department
(w) 1-866-PAC-OAK7 (1-866-722-6257)
Pacific Oak Capital Markets
3200 Park Center Drive, Suite 600
Costa Mesa, CA 92626