A Tax-Advantaged Way to
Reinvest a Capital Gain
A capital gain, whatever its source, raises a similar question: pay the tax now, or reinvest the gain and defer it.
Opportunity Zone investing lets eligible investors move a capital gain into a Qualified Opportunity Fund, defer tax on the original gain, and reduce tax on the new investment’s growth after a ten-year hold.
How It Works
From Reinvestment to Tax-Free Exit
From here, the investment follows a defined timeline. The gain, whether short-term or long-term, must move into the Qualified Opportunity Fund within 180 days of realization.
Day 180
Deadline to Reinvest
The capital gain must be invested in the Qualified Opportunity Fund within 180 days of realization to qualify for OZ tax benefits.
Year 0–4
Development
Construction begins on underlying projects right away, running concurrently with the reinvestment window, and continues through lease-up.
Year 4
Stabilization
Properties stabilize and may refinance from construction to permanent financing.
Year 5
Basis Step-Up
The deferred capital gain becomes taxable, reduced by a basis step-up — 10%, or 30% for Rural OZ Funds.
Year 10
Tax-Free Exit
After a ten-year hold, appreciation on the OZ investment is not subject to capital gains tax, with no depreciation recapture.
About the Program
About the Opportunity Zone Program
Qualified Opportunity Zones were created to spur long-term investment in designated communities.
Pinnacle Partners is an SEC-registered RIA focused on tax-advantaged private real estate opportunities within Opportunity Zones.
Eligible Gains
Sale of
Stock
Sale of Real Estate
Sale of a Business
Sale of
Crypto
Carried
Interest
Partnership
Interests
OZ Tax Benefits*
Basis
Step-Up
Defer Original
Capital Gains Tax
Eliminate Taxes on
OZ Investment Gains
No Depreciation
Recapture
*These tax benefits are associated with the current OZ program (OZ 2.0), made permanent through federal legislation in 2025.
Have More Questions?
Top 5%
OZ Fund Manager by equity raised, per Novogradac
$300M+
in OZ AUM
17*
multifamily projects capitalized or in progress
$1B+
capitalized in multifamily development
About Us
Pinnacle Partners is an SEC-Registered Investment Advisor (RIA) focused on tax advantaged private real estate investment opportunities; specifically, through Qualified Opportunity Zones and workforce housing developments, in partnership with 50+ RIAs and hundreds of individual investors. Pinnacle has capitalized over $1B in multifamily development projects, including more than 2,400 units of multifamily housing, and sources off-market opportunities with best-in-class development partners.
Exploring options for a capital gain?
Exploring options for a capital gain?
Schedule a call with our team to get you started.
Blake Backer
Principal & Vice President,
Investor Relations
Western Region
blake@pinnacleoz.com
425.736.7084
John “JB” Menefee, CFA
Director of Investor Relations
Eastern Region
john@pinnacleoz.com
541.610.5671
