Opportunity Zones

Opportunity Zones are designated areas, usually in economically distressed communities, where the government encourages investment by offering tax incentives. Investors can put money into these areas through Qualified Opportunity Funds (QOFs), which are used to finance businesses, real estate projects, or infrastructure improvements.

The key benefit of investing in Opportunity Zones is that investors can defer paying capital gains taxes on profits from other investments if those gains are reinvested into a QOF. Additionally, if the investment is held for at least ten years, any gains earned from the Opportunity Zone investment can be completely tax-free.

Individuals don’t need to meet specific financial criteria like in other investments (such as DSTs) to qualify for these tax advantages. However, they must reinvest their capital gains from previous investments into a Qualified Opportunity Fund within 180 days of selling the original asset.

This makes Opportunity Zones an attractive option for investors looking to reduce or eliminate their capital gains taxes while supporting the development of underserved communities.