Opportunity Zone Funds: Definition and How to Invest

1. Opportunity Zone Funds: Definition and How to Invest Qualified Opportunity Zones were established after the Tax Cuts and Jobs Act. The program is a move to encourage private investors to put billions of dollars into low-income areas. The point of the program is to generate change within these communities to boost business growth and operations. If you are interested in the program, understanding what it entails will help you determine if this is the right investment for you. What are Opportunity Zones? Opportunity zones or opportunity zone real estate is financially distressed areas. New investments in these areas come with tax perks. The preferential tax treatment is one way to boost investments.

2. How Do These Opportunity Zones Work? The idea is simple: for investors to make a profit, they must sell an asset and that sale must generate a capital gain. The investor then puts that capital gain into a Qualified Opportunity Zone fund. Once the investment reaches specific time frames or milestones, the investor can enjoy tax perks. Is This the Right Financial Option for You? If you are an investor and you are looking for investment opportunities that deliver incredible gains, this is one option you wouldn’t want to miss out on. Holding your investment in an opportunity zone comes with tax perks, depending on the milestones you’ve met. However, the best perk of all is the deferral of tax on capital gains. That tax perk, though, is only open to investors who can hold their investment in opportunity zones for ten years. That means you won’t have to worry about paying a cent of your capital tax gains tax. That’s the real prize. That’s also why it’s not a good fit for everyone. If you can’t hold the investment for at least five, eight, or even ten years, you miss out on those perks. However, if you can, then this tax benefit is massive.

3. Which Side Benefits More: Community or Investor? Both do. Investors are already in a position where they’re looking for opportunities that can help them make the most out of their funds. Low-income areas that have no way of getting the funds or business growth they need to drive positive change in the area also benefit from the influx of investments. Just imagine how it can improve quality of life in the area. A thriving community can better support the local population. How Do You Find Opportunity Zones? Work together with a real estate investment group. With their help in finding opportunity zones, you can determine which communities are worth investing. Also, if you want to take a more active role in the investment, or monitor the area for improvements, it’s ideal to work with a real estate investment team to help you pick out properties that meet those conditions. After all, not all opportunity zones make for an excellent investment. Get helpfinding out which properties hit the mark before you put your money into a qualified opportunity zone fund. What Do You Look For? Find a company that’s worked with lots of clients who’ve put money in qualified opportunity zones. Talk to them about their experience and expertise. That will help you get a sense of whether hiring them is a wise decision for you. Contact Us – GALENA EQUITY PARTNERS 999 W Main St, Ste 1400 Boise, ID USA, 83702 Call Us – 877-424-8282