A client recently sold his business and was looking for options to address a large capital gain as a result of the sale. We presented a number of solutions with support from his other advisors. One of the options we are implementing includes an investment in a Qualified Opportunity Zone (QOZ).
Opportunity Zones were born out of the Tax Cuts and Jobs Act of 2017. When structured properly, investing in a QOZ allows you to defer capital gains through 2026. In addition, if the holding period within the QOZ is 10+ years, any gain from the underlying investment is exempt from further taxation.
For more details on Qualified Opportunity Zones, please read the attached alert from the Advanced Planning Group at UBS.