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Friday, June 26, 2020

Opportunity ZOnes can Still Help with 2019 Capital Gains Taxes

- Learn How You Can Still Use Qualified Opportunity Zone Funds to Defer 2019 Capital Gains Taxes

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Learn How Qualified Opportunity Zones can Still Defer 2019 Capital Gains Taxes

Hello  - 

I want to provide you with educational material as to how Opportunity Zone Funds can be best utilized to help defer existing Capital Gains Tax while at the same time making a sound real estate investment.

As you would expect, in the world of Opportunity Zone Funds you'll find "the Good, the Bad & the Ugly".

I believe that the first test that needs to be passed before getting invovled in any OZ Fund is would you want to own the OZ Fund if there were NO Tax Benefits associated with the investment. Ask yourself "Does the OZ Fund stand on it's own investment merit" and think of the tax consequences as a secondary benefit.

If you just apply this simple test, you'll eliminate a lot of the "junk" that is being offered today...the "blind pools" ... the inexperienced Sponsors & Developers... the real estate plays by asset class or in markets that just don't make any investment sense...the Sponsors that don't ut any of their own money into the deal.

I'm going to be sending you a series of educational materials that will help you to more fully understand not only the tax mechanics but also what to look for in determining that all important feature of  investment merit.

At any time feel free to reach out to me with questions or to request information on current offerings that I feel "make sense".

For now, take a look at my content below discussing the deferral of Cap Gains Tax incurred in 2019.

All the best,


Are you aware of the wide variety of Capital Gains that may still qualify for investing in a tax-advantaged Qualified Opportunity Zone  ("QOZ") Fund? Even gains realized in 2019, before all the recent Covid market turmoil? With tax filing quickly approaching, now is an opportune time for a discussion around tax mitigation strategies. 

QOZ Fund Investing Quick Facts:

QOZ Fund investments can come from the capital gains generated from the sale of any asset, including the sale of real estate, businesses, securities, collectables, etc.

Do Not Ignore 2019 Capital Gains:

If a pass-through entity realized a gain in 2019 but did not reinvest the gain, the individual to whom the gain was distributed may consider investing in a QOZ Fund to mitigate the tax implications.

This includes partners in a partnership, members of a limited liability company, shareholders of a S Corporation, and beneficiaries of a trust, among others. 

The deadline for investing such gains is June 28, 2020, regardless of when in 2019 the pass-through entity realized the gain.

For entities other than a pass-through entity (e.g. individual ownership), capital gains generated from the sale of any asset (e.g. securities) are eligible to be invested in a QOZ Fund within 180 days of such realization.

Do Not Forget:

Capital gains eligible to be invested in QOZ Funds can be either short term or long term in nature.

Unlike 1031 like-kind exchanges, cash is fungible in QOZ investing: even if the individual spent or otherwise allocated the capital gain, any other source of cash up to the full amount of the capital gain can be invested in a QOZ Fund. 

Triple-layer tax benefits for QOZ Fund investors include deferral (1), reduction (2) and elimination (3).

Based upon our analysis, the combined tax benefits of a QOZ Fund investment made in 2020 can add approximately 400 basis points in pre-tax equivilent yield to a real estate investment located in a QOZ Fund relative to the same real estate investment not located in a QOZ - over a ten-year period (4).

This information should not be construed as tax advice. Investors should consult their own tax advisors to determine their individual benefits in a QOZ Investment. 

If you have questions concerning 1031 Exchange, or Opportunity Zone Tax Planning, please feel free to reach out to me. We have investment grade properties for both 1031 Exchanges & Qualified Opportunity Zone Funds available now. 

Thank you for your interest & let me know how I might be of further assistance.

"Informed Investors Simply Make Smarter Investment Decisions"

Steve Arnold

(1) Deferral until December 31, 2016 of the federal capital gain tax due on the contributed capital.
(2) Reduction of 10% of the federal capital tax due on the contributed capital
(3) Elimination of federal capital gains tax on any gain in the value of the QOZ Fund, provided the investor holds the investment for a minimum of ten years.
(4) This is an estimate calculated by Griffin Capital Company, LLC and there is no guarantee such additional return will be realized.

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