We Answer Your Top Questions About Investing in OZs!

There have been quite a few headlines lately about Opportunity Zones, and what the future may look like with the potential extension of the program. You can learn more about what the industry leaders are saying in our recent blog post here. 

As we continue to bring you up-to-date on the latest developments for Opportunity Zone investing, we wanted to highlight some of the most frequently asked questions we get from investors. 

Question 1: What are the eligible gains? 

Eligible gains that qualify for reinvestment into Opportunity Zone Funds include the sale of stock, real estate, a business, cryptocurrency, art, and partnership interests.

Question 2: Can I still invest in OZ funds without having any eligible gain? 

Yes. Any investor meeting the suitability and financial qualifications can invest. Although an individual who invests in a Qualified Opportunity Fund (QOF) without eligible gains will not enjoy the tax benefits of the Opportunity Zone program.

Question 3: What are the tax benefits of investing in OZs? 

Investors can defer paying capital gains tax by reinvesting their eligible gains into an Opportunity Zone Fund within 180 days of the sale. Such eligible gains can be deferred until December 31, 2026. Not only that, but investors can also exclude any gains from their investment if they hold the investment in an OZ Fund for at least 10 years. Last but not least, there is no depreciation recapture with OZ investments. 

Question 4: Do I need to live in an Opportunity Zone to take advantage of the tax benefits? 

No. You can take advantage of OZ tax incentives even if you don’t live, work, or have an existing business in a QOZ.  

Question 5: Are OZ investments limited to specific asset classes? 

No. The types of asset classes you invest in will depend on the OZ Fund that you choose to invest in. For instance, our Build-to-Rent (BTR) OZ Fund has three BTR townhome development projects. There are OZ Funds that invest in self-storage, multifamily, industrial properties and more. 

Have more questions about investing in OZ Funds? Contact us today by filling out the form below. 

Past performance of Pinnacle Partners OZ Funds is not indicative of future results. There can be no assurance that the fund’s objectives will be achieved or that cash distributions will, in fact, be made or, if made, whether those distributions will be made when or in the amount anticipated or that certain tax benefits will be available to investors. An investment in the fund is illiquid, speculative, and will involve significant risks. It is only offered to suitable and qualified investors. Full details about the fund and its associated risks can be found in the fund offering documents. 

Nothing in this blog post should be construed as tax advice.  Please confer with your tax adviser to determine if an investment in an OZ fund is right for you.