A Wizards Guide

Qualified Opportunity Zones...QOZs, OZs, O-Zones (all the same thing) I have been told that my posts may have started too far down the rabbit hole in terms of information. So let's get back to basics: What is an Opportunity Zone?-The New Tax Code allows for certain low income areas to be designated an OZ. Every State has areas that have been certified as such a zone. Why does anyone care so much?- If you have ANY capital gain: sale of Facebook stock, sale of your home, sale of a piece of Real Estate, you can pay those taxes in the future by investing it in an Opportunity Zone. Why is this different than any other deferral?- If you hold the investment for 5-7 years you get a reduction on of 10-15% of that taxable gain. So $100,000 gain reduced to $85,000. You are only paying tax on that $85,000. But wait there's more: After 10 years, when you finally "exit" that investment (the explanation of such an exit is complicated) the gain on the investment is tax free. So if your investment's value has improved over your lets say a $100K investment, and has doubled to be worth $200K, that ADDITIONAL $100K that you realize after 10 years, is TAX FREE. Hope this was more clear. #dontbeataxpuppet #backtobasics Stay tuned for more back to basics posts on QOZs. #wizardofqoz