Opportunity Zone Tax Benefits
Maximize your tax savings with strategic OZ investment planning
Three Powerful Tax Benefits of Opportunity Zone Investments
Opportunity Zone investments offer three distinct tax advantages that can significantly reduce your tax burden while generating strong returns. Understanding these benefits is crucial for maximizing your investment potential.
1. Capital Gains Deferral
Defer paying capital gains taxes until December 31, 2026, or when you sell your OZ investment, whichever comes first.
- Defer taxes on capital gains from any source
- Must invest within 180 days of gain realization
- Taxes due by December 31, 2026
- No limit on deferral amount
2. Basis Step-Up
Reduce your deferred capital gains by 10% after 5 years and an additional 5% after 7 years, for a total 15% reduction.
- 5-year hold: 10% basis step-up
- 7-year hold: Additional 5% (15% total)
- Must hold until December 31, 2026
- Maximum 15% reduction on deferred gains
3. Tax-Free Appreciation
Eliminate capital gains taxes on appreciation if you hold your OZ investment for at least 10 years.
- Must hold for 10+ years
- Tax-free appreciation on OZ investment
- No limit on appreciation amount
- Must sell by December 31, 2047
OZ Tax Savings Calculator
Calculate Your Potential Tax Savings
Tax Benefits Case Study
$5M Business Sale Tax Optimization
Situation: Tech entrepreneur sold company for $5M with $4M in capital gains
Without OZ Investment
- Capital gains tax: $800K (20%)
- Net proceeds: $4.2M
- Investment amount: $4.2M
- 10-year value: $9.1M
- Tax on appreciation: $980K
- Net after taxes: $8.1M
With OZ Investment
- Deferred tax: $800K until 2026
- Basis step-up: $120K (15%)
- Investment amount: $5M
- 10-year value: $10.8M
- Tax-free appreciation: $5.8M
- Net after taxes: $9.9M
Total Tax Savings: $1.8M
Additional return of 22% over 10 years
Ready to Maximize Your Tax Benefits?
Schedule a consultation with our tax specialists to develop a strategic OZ investment plan that maximizes your tax savings.