JMA Ventures LLC

Qualified Opportunity Fund: Defer Taxes, Increase Basis, Full Step Up at Sale. On December 22, 2017, Congress adopted legislation including Qualified Opportunity Zones as part of the Tax Cuts and Jobs Act, which provides for deferral of long-term capital gains tax and, in some cases, a significant step up in basis and elimination of long-term capital gains. This little-known, rarely-mentioned provision in the $1.5 trillion tax cut is projected to save investors $1.6 billion in capital gains taxes over the next 10 years – to say nothing of the exceptional returns that investors can make on well-advised investments. Opportunity Zones present a compelling investment opportunity. Governors of each state designated 25% of low income census tracts in each state. The Secretary of the Treasury confirmed the QOZ census tracts on June 20, 2018. QOZ designations last 10 years. To qualify for tax deferral, an investor’s capital gains must be reinvested into a Qualified Opportunity Fund within 180 days from the date of the sale or exchange that generated the capital gain.