Economic Opportunity Zones

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The Opportunity Zones Program provides the following three benefits to investors when capital gains are reinvested into a Qualified Opportunity Fund (QOF) within 180 days after sale. 

  1. Deferral of Capital Gain- Delay payment of capital gains tax bill on original gain until December 31, 2026.
  2. Partial Exclusion on Original Gain- If the QOF is held for 5 years, the investor’s cost basis will increase by 10% of initial gain deferral. If the QOF is held for 7 years, the investor will receive an additional 5% step-up in basis for a total of 15% of the original gain being excluded from tax.
  3. Permanent Gain Exclusion on Fund Appreciation- Investors who hold their QOF investment for at least 10 years will receive a basis increase equal to 100% of the QOF’s fair market value on the date of sale, resulting in no tax due on the QOF’s appreciation.

Note: All assets which are located in an opportunity zone when purchased by the QOF must be improved by incurring costs greater than 100% of the initial basis in the assets over 31 months.

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UpVentures is not in the business of providing tax or legal guidance. Before making any QOF investments, we strongly recommend evaluating Economic Opportunity Zone Tax Incentives and other tax implications resulting from distributions with your financial advisor.