Professional tax advisor Tony Nitti of WithumSmith+Brown’s National Tax Service Group has an excellent and thorough (and at times humorous!) Q&A-format article on Forbes this week. The article dives headfirst into many of the subtle nuances of the legislation, dealing with original gain deferral, the 180-day window, qualified opportunity funds, OZ property, and tax savings.
We start by accepting this: there are a LOT of moving parts to Section 1400Z-2. A lot of critical terms that sound very similar. And a lot of quantitative standards that must be met. We’re going to have to sort through all of this stuff, but let’s start by laying out a rudimentary flowchart showing how this all works:
Step 1. Taxpayer recognizes capital gain on the sale of assets.
Step 2. Within 180 days, the taxpayer reinvests some or all of that gain in a qualified opportunity fund (QOF).
Step 3. The QOF, in turn, must invest more than 90% of its assets in qualified opportunity zone property (QOZP) located within a qualified opportunity zone (QOZ).
Continue reading on Forbes: Tax Geek Tuesday: Reaping The Benefits Of Investing In An Opportunity Zone
Update 11/28/18: Tony Nitti joined the Opportunity Zones Podcast (inaugural episode!) to discuss Opportunity Zone Tax Benefits and Unintended Consequences.