Chances are you’ve read about the federal Opportunity Zone incentive program + how it’s poised to bring major investment to economically distressed areas around the country.
With 8,700 zones designated nationwide — including 176 in Tennessee + 7 in Hamilton County — you might wonder if the program’s robust tax benefits are something you can take advantage of.
Here’s a scenario. Let’s say you’ve made some smart financial decisions with property + investments, but you’re afraid of the significant capital gains taxes you’ll have to pay when you sell your assets.
If this sounds like a challenge you’re facing, you’re in luck… because the tax benefits provided by Opportunity Zones aren’t just for real estate developers, retailers + hoteliers.
A few details to know:
- You have to invest in a qualified fund
- Taxes on capital gains can be deferred until 2026
- Investing for 5 years reduces tax exposure by 10%
- Or by 15% for investing 7 years
- After 10 years, you can permanently forgo capital gains taxes
But the key to taking advantage of the proverbial opportunity of Opportunity Zones is planning ahead. That’s why the wisest thing you can do now is to seek out a seasoned tax advisor — ideally one with real estate experience.
To learn more about the tax benefits of Opportunity Zones + how a tax advisor can help you plan, read this article from Elliott Davis. Ⓟ