Tax Deferral

Defer payment of your capital gains until Dec 31, 2026.

Tax Reduction

Reduce the tax you owe by up to 15% after 7 years.

What is an Opportunity Fund?

An Opportunity Fund is a new investment vehicle created as part of the Tax Cuts and Jobs Act of 2017 to incentivize investment in targeted communities called Opportunity Zones.  A Qualified Opportunity Zone Fund is any investment vehicle which is organized as a corporation or a partnership for the purpose of investing in qualified opportunity zone property (other than another qualified opportunity fund) that holds at least 90 percent of its assets in qualified opportunity zone property.

What are Opportunity Zones?

The 2017 Tax Cuts and Jobs Act established the Qualified Opportunity Zone program to provide a tax incentive for private, long-term investment in economically distressed communities.  An Opportunity Zone is a community nominated by the state and certified by the Treasury Department as qualifying for this program.  As of June 14, 2018, the department certified zones in all 50 states, Washington, D.C., and U.S. territories.  There are approximately 8,700 Opportunity Zones nationwide.

Why invest in OPA Opportunity Funds?

OPA Opportunity Funds provide investors with a platform to take part in a new and exciting investment vehicle designed to incentivize rebuilding economically distressed communities through unprecedented beneficial tax treatment on capital gains invested.  Investors are able to defer federal taxes on any recent capital gains until December 31, 2026, reduce their tax liability payment by up to 15%, and pay as little as zero taxes on potential profits from an OPA Opportunity Fund if the investment is held for 10 years.

How is an Opportunity Fund better than a 1031 Exchange?

The 1031 exchange is commonly referred to as “a perpetual deferral until the ultimate exit.”  If at any point an investor sells an asset, they are on the hook for the gains.  This leaves most investors holding their real estate until death (the ultimate exit) so that at least their heirs get the step-up in basis.

With Opportunity Zones, investors don’t have to die to eliminate the capital gains tax burden.  After 10 years, the entire basis automatically steps up.  And, investors don’t have to jump through hoops to get it.

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Unlike the 1031, where an investor may have to pay “depreciation recapture”, Opportunity Zones allow for saving taxes on any depreciation of the asset.  Thus, an investor can use depreciation to offset income in the rest of the portfolio.

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Furthermore, with a 1031, it’s all or nothing.  The initial investment is locked in along with the capital gains accrued over the life of the investment.  And, it all goes into the rollover asset chosen next.  This is not the case when investing in Opportunity Zones.  An investor may have additional capital as part of the initial investment or “initial basis”: that additional non-capital gains investment can be taken out without penalty.