Interested in not paying the IRS for unrealized Capital Gains received this year? Discuss this amazing opportunity with your financial advisor.
The authority to implement IRC 1400Z-1 and 1400Z-2 have been delegated to the IRS. The CDFI Fund is supporting the IRS with the Opportunity Zone nomination and designation process under IRC 1400Z-1 only.
The recently passed Tax Reform Act included a potential tax break for investors. An investor may defer capital gains taxes on the sale of any asset. These taxes can potentially be deferred until December 31, 2026, or the date of a sale (whichever is earlier). As discussed below, this original capital gains tax is reduced over time, and if held long enough, new appreciation on the investment can be realized tax-free.
Here’s how the process works. An investor sells an asset and generates a capital gain. The capital gains from that investment must be reinvested within 180 days into a designated Opportunity Zone (OZ). An OZ is a specially designated census tract. Large parts of the U.S. are eligible for designation, including many commercial, industrial and residential areas.
If the investment is held, the capital gains liability on the original investment will be reduced by 10% after five years and by 15% after seven years. After 10 years, the new capital gains taxes generated from the opportunity fund investment are reduced to zero.
For more information please visit us at http://www.rpmres.com/opportunity-zones/ or call us for more information.
Presented by: Danny Raffle CCIM, President of RPM Commercial Real Estate