Qualified Opportunity Zones

 Tom Fyler and Commodities & Securities, Inc. establish Qualified Opportunity Zones (QOZs) that improve the lives and opportunities for people living in struggling, low income communities. Clients who invest in these communities benefit with prospective capital gains tax savings. 

Below is information about Qualified Opportunity Zones from the Internal Revenue Service:

The following questions and answers (Q&As) were prepared in response to inquiries that have been proposed to the IRS.  They are intended to provide a basic understanding and awareness of Opportunity Zones. These Q&As do not constitute legal authority and may not be relied upon as such.  They do not amend, modify or add to the Income Tax Regulations or any other legal authority.   

 What is the Purpose of a QOZ?  

QOZs are designed to spur economic development by providing tax incentives for investors who invest new capital in businesses operating in one or more QOZs.

• First, an investor can defer tax on any prior eligible gain to the extent that a corresponding amount is timely invested in a Qualified Opportunity Fund (QOF).  The deferral lasts until the earlier of the date on which the investment in the QOF is sold or exchanged, or December 31, 2026.  If the QOF investment is held for at least 5 years, there is a 10% exclusion of the deferred gain.  If held for at least 7 years, the 10% exclusion becomes 15%.  Additionally, the amount of eligible gain to include is decreased to the extent that the amount of eligible gain you deferred exceeds the fair market value of the investment in the QOF.
• Second, if the investor holds the investment in the QOF for at least 10 years, the investor is eligible for an adjustment in the basis of the QOF investment to its fair market value on the date that the QOF investment is sold or exchanged.  As a result of this basis adjustment, the appreciation in the QOF investment is never taxed.  A similar rule applies to exclude the QOF investor’s share of gain and loss from sales of QOF assets. 

https://www.irs.gov/credits-deductions/opportunity-zones-frequently-asked-questions#general