Qualified Opportunity Funds: Deferral And Potential Forgiveness Of Capital Gains
In December 2017, a U.S. congressional bipartisan effort known as the Opportunity Zone Program was added into the tax reform legislation (Tax Cuts and Jobs Act of 2017). The intent of the program is to encourage individual investors and companies to invest in specific census tracts around the US in an effort to promote economic development in low income communities.
The Concept Of “Property” Among Qualified Opportunity Funds
Investing in a Qualified Opportunity Zone (QOZ) program is fairly straightforward. An investor takes their realized gain from an asset sale and invests it in a Qualified Opportunity Fund (“QOF”) to defer taxes on that gain. At the same time, the investor will potentially avoid capital gains on the appreciation of the Qualified Opportunity Zone Property. Another bonus is the QOF will put their funds to work in a low-income community that might be in dire need of resources. In business parlance, this represents a “win-win-win.”
What Is A Qualified Intermediary?
When an investor approaches the 1031 exchange process, they are greeted by a variety of choices. One of the most important of these is selecting a Qualified Intermediary—also known as a 1031 Exchange Accommodator. These parties have three primary responsibilities, which are intended to ensure compliance with the IRS’s rules in a 1031 exchange. These responsibilities are:
Qualified Opportunity Zone Stock: Buying Pieces Of A Company
Qualified Opportunity Zone Stock, or QOZ, is one of the three designated asset types collectively called Qualified Opportunity Zone Property, in which a Qualified Opportunity Fund (“QOF”) can invest.
Cashing Out To Bring More In
As a real estate investor, there could be times when you find you might need more cash than what your revenue streams can provide. Maybe you want to make improvements on your current properties. Or, perhaps, you want to buy additional assets to expand your portfolio.
Boosting Your Basis To Boost Your After-Tax Cash Flow
Buying and selling real estate should be a fairly simple process. You buy it, it (hopefully) appreciates in value, then you sell it. However, there can be a capital gains tax attached to that profit, meaning your after-tax cash flow (ATCF) could take a hit.
Deadline Approaching To Defer Capital Gains By Investing In Opportunity Zone Fund
For investors who reported significant capital gains on their 2018 K-1s or had capital gains from business and investment partnerships, there’s a way to potentially receive favorable tax advantages — both short- and long-term — on those profits. However, the deadline to defer payment of certain 2018 gains until 2026 — as well as the potential to reduce total tax liability on said gains by 15 percent if held for 7 years — is June 28.
Many Benefits, One Trust: Learning About CRUTS
You could be someone who is respectful of, or has a passion for a particular non-profit organization or charity. Perhaps you donate regularly to this organization, understanding that the money you give can do anything from improving survival rates of diseases, to providing clean drinking water to third-world countries, to supporting homeless animals at the local shelter.
Properly Defining Qualified Opportunity Zone: Business Property
People and businesses invest money in different property types for all sorts of reasons. From a legal standpoint, property is defined as something you own. Qualified Opportunity Funds (“QOF”) are uniquely positioned to invest in Qualified Opportunity Zone (“QOZ”) Business Property in a way that may change strategies for investors across the U.S.
Alphabet Soup: REITs, DSTs, And What They Mean For You
If you’ve been following these blogs for any length of time, you know there are several different ways in which you can invest in real estate. There are direct investments, in which you place your funds directly into a piece of land, second house or industrial warehouse for example.
