This week, we’re answering another viewers question: “We saw your 1031 Exchange video and really enjoyed it, but what is the deal with these “opportunity zones”?”

In 2017 the Tax Cuts & Jobs Act (TCJA) was enacted and introduced the concept of Opportunity Zone Funds. As a real estate investor, it is a huge benefit to understand what an Opportunity Zone Fund is.

This act has created certain zones within our country where they have declared that they need assistance. These are areas with depressed markets: The businesses are down, real estate is down, socioeconomics are down. With that being said, it would be idealistic for an investor or someone who has capital gains to pay, take those capital gains and put them in an equity fund and invest in those areas. If they invest in those areas, their taxes will be deferred. If an individual invests in such funds, for 10 or more years, they eliminate the Capital Gains Tax.

So, when you sell and you have capital gains, you can put those funds into one of these “O-Zone” Equity Funds and distribute within a community.

If you are looking for help in understanding these funds and how they could maximize your overall wealth, contact Stiles Law by calling (781) 319-1900.

Copyright © 2020 Stiles Law, All rights reserved. Stiles Law is a Massachusetts licensed law firm and all content is based on Massachusetts law. The information presented above is meant to be used for general informational purposes and it should not be construed as legal advice or legal opinion on any specific facts.