There is a newly created tax incentive called opportunity zone investing and it could be a huge benefit for you.As you wait for the coveted liquidity event or have experienced one in the last 180 days – you may be able to actually keep the vast majority of your money and keep it invested, instead of sending 30-50% of it off to the IRS and your state(s).
Getting to a liquidity event is hard enough and watching so much of that money disappear is frustrating. Fortunately, the new tax legislation has provided an “opportunity” to defer this tax and also build the value of your investment on a tax-free basis for the next 10+ years.
As part of the most recent Federal tax billed which passed in late 2017 and became effective 1/1/18, there is a newly created tax incentive called “opportunity zone investing.” The Tax Cuts and Jobs Act provided for this benefit, and it could be a huge benefit for you.
Here is an example of how it works:
Now let’s assume you invest the $1,800,000 into a diversified O-Fund to invest in real estate and in 10 years that investment is worth $4,000,000.
It should also be noted that you do not need to invest the entire gain to achieve the tax benefits. You could, for example, invest $1,000,000 of the $1,800,000 from the example above and defer taxes on the $1,000,000. You would still owe taxes on the $800,000 in this example, but at least you have controlled how and when you paid the tax.
For more information on Opportunity Zone Investing, please contact Jordan Taylor of Vestboard (480) 544-6230. Note that ESO has no formal affiliation with Vestboard or any Opportunity Zone fund. We merely provide this information as a public service and it is solely your responsibility to conduct due diligence before investing in any Opportunity Zone fund.