Scott Wohlers is Vice President at Riverplace Capital Management in Jacksonville, Florida, a private independent wealth management firm that has been serving clients locally and nationally for more than 20 years.
A relatively new area for tax protection that has stimulated some interest and excitement amongst investors is something called Opportunity Zones. If you have recently incurred capital gains and are interested in deferring, reducing or eliminating those gains, you may benefit from investing in an Opportunity Zone.
Opportunity Zones were created as a portion of the Tax Cuts and Jobs Act passed in December 2017. The purpose of Opportunity Zones is to encourage investment in low-income areas to help increase employment, stimulate the local economy and create an overall improved quality of life. Opportunity Zone investing from the new act creates three types of tax benefits for investors. First, a deferral of capital gains until December 31, 2026; second, a potential for partial forgiveness of capital gain depending on when the investment into the Opportunity Zone investment is made; and lastly, if the investment is held for more than ten years there is no tax paid on future gains. The initial perception was that Opportunity Zone investing was just about commercial real estate investing. However, this is not the case at all!
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