The 2017 Tax Cuts and Jobs Act made many big changes. One often overlooked change is the creation of Opportunity Zones which create big tax incentives for investors to invest in economically distressed areas of the country, with the goal of aiding economic development in these areas.
One major benefit of these funds is the ability to defer capital gains on investment sales if the proceeds are rolled into a qualified fund within a period of 180 days and to reduce or even eliminate further capital gains based on the length of time the investment in the opportunity zone is held.
This new area of tax has the potential to save taxpayers billions of dollars while simultaneously helping underdeveloped communities to grow and expand.
There are many new rules that go with setting up and maintaining a fund. Funds must comply with rules which require 90% of fund assets to be held in qualified assets and must certify the same. Qualified funds may either be registered as corporations or as partnerships.
This area of tax law is extremely new, and as always RMS Accounting is staying on the cutting edge. So if you need any assistance finding out how these funds could potentially have huge tax savings for you, or you need assistance with understanding how to establish your own fund, RMS Accounting is always only a phone call away. 1-800-382-1040.