Several years after opportunity zone investments were incentivized by the federal government, new opportunities to invest in these areas to reduce current and future tax liability continue to arise.
One savvy way to help defer your tax liability on capital gains and potentially build passive income streams could be by investing in a qualified opportunity zone.
A program that was established under the Tax Cuts and Jobs Act of 2017 with the idea of providing a tax incentive for real estate investors.
– Converting vacant homes for single-family rental units – Improving abandoned lots for commercial or residential use
Due to this anticipated change, many investors with capital gains are looking to allocate their cash in vehicles.
Some QOZ pros include: – Tax breaks – Tax deferral – Improves low-income communities
Some QOZ cons include: – Illiquid investment (minimum of 5 years) – Many investment options with little oversight