Qualified Opportunity Zones: What Investors Should Know

A suitable investment can make a massive difference to your bottom line. Consider qualified opportunity zones if you have the funds and want to know where you can put your money. Here’s why OZ programs offer one of the best investment opportunities on the market.

What are Qualified Opportunity Zones?

Qualified opportunity zones offer tax liability for capital gains. With the deferral of the taxes on those capital gains, investors stand to receive considerable profit. Investors can also enjoy up to a hundred tax-free gains on their investment if they hold on to them based on the conditions required by the program. If you want to invest, look for opportunity fund options that suit your needs and risk profile.

How Did Opportunity Zones Start?

It was the Tax Cuts and Jobs Act of 2017 that introduced this incentive. Capital gains will be deferred for investors until December 31, 2026, deemed to be payable in 2027. Congress is now thinking about extending the qualified opportunity program to 2028. Considering the benefits of the program and how it’s helped many low-income communities, that decision isn’t surprising. Investors who hold the original investment can look forward to 100 percent tax-free gains.

How Do You Invest in an Opportunity Zone?

• Determine where the opportunity zones are. That’s not easy to do on your own, so you’ll need the assistance of an investment group. There are real estate companies that offer investment advice. Consider those options. Look for a reputable company that can help you navigate opportunity zone programs and opportunity zone funds.

• Create an opportunity fund. You need an opportunity fund to invest in qualified opportunity zones. That’s one of the first things you’ll learn from an investment group. You can also use REIT. To learn more about your options, discuss them with an investment expert.

• Apply investment strategies. Once you have put money in qualified opportunity zones, the next task is to learn and implement investment strategies that you can use to leverage the capital gains you can expect from your investment. If you want to grow your portfolio even more with the profit you’ll get from the deferred taxes on your capital gains, learn strategies. That will help you further diversify your portfolio, so you can spread the wealth around. Investment strategies can help you make your money work for you.

When is the Deadline?

While it’s understandable that you’ll want to take your time deciding whether to give this a try or not, don’t take too long. Investing in opportunity zones offer tremendous tax perks. But that offer won’t stay open forever. You need to invest in a qualified opportunity fund within 180 days after triggering the capital gains. If you don’t arrive at a decision by then, you could miss out on your chance to invest in a qualified opportunity zone.

What’s the Time Commitment?

You’ll need to hold the investment for ten years if you want to enjoy 100-percent tax-free gains. However, not everyone has the means or luxury for that, so make sure you have no problem with the time commitment before you proceed.