Investors get big tax breaks investing in Opportunity Zones

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Investors can get big tax breaks if they invest in Opportunity Zones under new Treasury rules

For Our Palace Way LP Opportunity Zone Investment Fund Information Please visit

The Tax Cuts and Jobs Act of 2017 (TCJA)

  The (TCJA) has provided additional tax benefits from investing in “Qualified Opportunity Funds.” These funds create a new tax incentive program designed to promote new investment capital into certain low-income and distressed communities throughout the country. They are referred to as Qualified Opportunity Zones. The program enables investors with unrealized capital gains to receive significant tax incentives for investing in these funds

Opportunity Funds:

  A Qualified Opportunity Fund is a privately managed investment vehicle, generally formed as a partnership, LLC or a corporation, whose sole purpose of formation is to invest at least 90% of its assets directly invested into a qualified Opportunity Zone property.

Qualified Opportunity Zones:

 Qualified Opportunity Zones are designated census tracts or neighborhoods. For a census tract to be treated as a Qualified Opportunity Zone, the governor of the respective state must identify such communities in writing to the U.S. Treasury Department. The Treasury Department must then certify each designated area as a Qualified Opportunity Zone. Each zone will maintain its designation for 10 years. 

Tax Incentives:

 Under the TCJA there are three specific tax incentives possible for investing in a Qualified Opportunity Zone fund: 


Our Opportunity Zone fund;


The Palace Way Opportunity Zone Investment Fund: Visit our OZ fund web site.

lwww.palaceway.com

Tax Savings

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Elimination of 10% or 15% of the Deferred Gain:

  

  1. 10% of the gain on investments in Qualified Opportunity Funds may be excluded if the taxpayer holds the interest in the Qualified Opportunity Fund for at least five years.
  2. This exclusion may be increased by an additional 5% if the investment is      maintained for at least seven years, thereby eliminating potentially 15%      of the original gain from taxation.
  3. The exclusion is achieved through a step up in basis in connection with the  original gain.

Permanent Exclusion on Taxable Gain:

 When the investment in the Qualified Opportunity Fund is held for 10 years, the taxpayer will not recognize taxable gain on the appreciation in value of the investment in the Qualified Opportunity Fund. 

Check with your CPA:

 Check with your CPA to find out how investing in these Qualified Opportunity Funds will impact your investments. lwww.pa