Opportunity Zones (part 1)

Michelle Bertram and Beverly Bertram are financial advisors living in Mineral Point WI and serving the surrounding communities. Michelle Bertram does financial planning for retirees along with business consulting. Beverly Bertram specializes in retirement planning and income planning for her clients. Michelle Bertram and Beverly Bertram are authors of the book, Creating You DREAM Retirement and creators of the DREAM Retirement Process. Serving Madison WI, Verona WI, Mount Horeb WI, Barneveld WI, Dodgeville WI, Dubuque IA, Platteville WI, Lancaster WI, Cuba City WI, Fennimore WI, Darlington WI, Monroe WI, Spring Green WI, Black Earth WI and beyond

Opportunity Zones were created through the Tax Cuts and Jobs Act of 2017. Opportunity Zones are low-income census tracts nominated by U.S. State Governors and certified by the U.S. Department of the Treasury, to encourage investors to reinvest their capital gains into these areas, in exchange for certain Federal (and possibly State) capital gains tax advantages. The United States has over 8,700 designated Opportunity Zone census tracts throughout the country, in every state and every U.S. territory.

Specially designated investment vehicles, known as Qualified Opportunity Funds, must hold at least 90 percent of their assets in Opportunity Zone census tracts to realize the stipulated capital gains tax benefits. U.S. taxpayers currently hold over six trillion dollars in unrealized capital gains, which can serve as an untapped resource for economic development in Opportunity Zones.

Qualified Opportunity Funds provide investors the chance to put that money to work in rebuilding the nation’s left-behind communities. The REIT structure enables a broad array of investors to pool their resources into Opportunity Zones, increasing the scale of investments going to underserved communities.

To take advantage of the tax benefits of investing in Opportunity Zones, investors must reinvest their capital gains from a prior investment into a Qualified Opportunity Fund, within 180 days of the recognized sale of that prior investment.

Capital gains in a wide array of asset classes, including but not limited to: stocks, bonds, commodities, cryptocurrencies, artwork, automobiles, jewelry, and real estate, are all eligible to received tax benefits through reinvestment of capital gains into Opportunity Zones.

Only capital gains are eligible to receive the Opportunity Zone benefits, but the eligible capital gains can be either short‐term or long‐term gains. The principal/basis from a prior investment itself can also be invested in an Opportunity Zone but will not receive the same tax benefits.

Example: You sell stocks or real estate for $300,000. Your cost basis is $100,000 so you have capital gains of $200,000 that will be taxable. You can take just the $200,000 gain (or part of it) and invest it in an Opportunity Zone fund that will delay and possibly reduce the capital gains tax. Next week we will cover all the tax benefits and how they are structured in Opportunity Zones.

Opportunity Zones were created through the Tax Cuts and Jobs Act of 2017. Opportunity Zones are low-income census tracts nominated by U.S. State Governors and certified by the U.S. Department of the Treasury, to encourage investors to reinvest their capital gains into these areas, in exchange for certain Federal (and possibly State) capital gains tax advantages. The United States has over 8,700 designated Opportunity Zone census tracts throughout the country, in every state and every U.S. territory.

Specially designated investment vehicles, known as Qualified Opportunity Funds, must hold at least 90 percent of their assets in Opportunity Zone census tracts to realize the stipulated capital gains tax benefits. U.S. taxpayers currently hold over six trillion dollars in unrealized capital gains, which can serve as an untapped resource for economic development in Opportunity Zones.

Qualified Opportunity Funds provide investors the chance to put that money to work in rebuilding the nation’s left-behind communities. The REIT structure enables a broad array of investors to pool their resources into Opportunity Zones, increasing the scale of investments going to underserved communities.

To take advantage of the tax benefits of investing in Opportunity Zones, investors must reinvest their capital gains from a prior investment into a Qualified Opportunity Fund, within 180 days of the recognized sale of that prior investment.

Capital gains in a wide array of asset classes, including but not limited to: stocks, bonds, commodities, cryptocurrencies, artwork, automobiles, jewelry, and real estate, are all eligible to received tax benefits through reinvestment of capital gains into Opportunity Zones.

Only capital gains are eligible to receive the Opportunity Zone benefits, but the eligible capital gains can be either short‐term or long‐term gains. The principal/basis from a prior investment itself can also be invested in an Opportunity Zone but will not receive the same tax benefits.

Example: You sell stocks or real estate for $300,000. Your cost basis is $100,000 so you have capital gains of $200,000 that will be taxable. You can take just the $200,000 gain (or part of it) and invest it in an Opportunity Zone fund that will delay and possibly reduce the capital gains tax. Next week we will cover all the tax benefits and how they are structured in Opportunity Zones.

HAPPY THANKSGIVING! We live in the land of opportunities, something to truly be thankful for!

To find out more, watch our short Opportunity Zone video!

For more information, to request a free copy of our book or to read our blog with the opportunity Zone video, go to www.CreatingYourDreamRetirement.com