New, with the Tax Cuts and Jobs Act, you can take your gains from stock sales, invest in local Tucson real estate, and pay ZERO taxes! These are called Qualified Opportunity Zones. Here are the basics:
What is an Opportunity Zone?
An Opportunity Zone is an economically-distressed community. There are several zones in Tucson.
Why would I invest in an opportunity zone?
The tax savings can be great! If you have recently sold stock or other real estate for gain, you can invest those gains in a qualified O-zone real estate partnership. Then if you maintain the new investment for 10 years, you will pay $0 taxes on the initial stock or real estate gain. If you only hold on to the new investment for five years, you can still exclude 10% of deferred gain. These can be a great alternative to 1031 exchanges.
I sold some stock for a gain at the beginning of the year, can I use those funds to invest in an Opportunity Zone?
You have 180 days (6 months) from the date of sale to re-invest the proceeds to take advantage of this opportunity.
Any other caveats I should know about?
Of course there are. But the main one is that it only works if you’ve recently sold stocks or real estate for a capital gain. Also, many of the qualified opportunity zone funds require that you be an accredited investor to participate.
Questions? Schedule an appointment online, or give us a call at (520) 321-4626.