(909) 799-8565 | info@CPAJamison.com


Opportunity Funds

November 13, 2018

We want to share a potential tax saving opportunity with you. One of the hidden gems of the Tax Cuts and Jobs Act of 2017 (TCJA) is the ability to defer paying federal tax on capital gains, which can be at a rate as high as 23.8%, by investing in an Opportunity Fund. We saw the potential of this program early on, however we always strive to become expert advisors before beginning to educate our clients regarding tax planning matters. Unfortunately, as has been the case with many of the provisions of the recent tax reform efforts, guidance from the government on how the Opportunity Zone and Opportunity Fund legislation is to be implemented has been slow to develop.

While the TCJA was signed into law on December 22, 2017 it was not until October 19, 2018 that the US Treasury Department issued proposed regulations for the implementation of this aspect of the law. After studying the preliminary guidance for several months and now being able to fully digest the regulations, we are now satisfied that we are able to properly advise you in this area.

Investors who reinvest a 2018 capital gain into an Opportunity Fund get three tax breaks:

1– Deferral of federal tax on their 2018 capital gain until 2026

2– A 15% reduction on the gains when they are taxed for federal purposes in 2026

3– Growth of the new investment is not subject to federal tax if held for at least 10 years

Taxable capital gains can result from the sale of stock, the sale of a business, the sale of investment real estate or even from the sale of your home. If you have any realized capital gains during 2018, please contact us to discuss how we can help you take advantage of this money saving opportunity.

Unfortunately there is only a 180 day window to re-invest any realized capital gains into a qualified Opportunity Fund, so time is of the essence. Please call us at (909) 799-8565 to schedule a consultation about your specific situation. 

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