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Qualified Opportunity Zones Offer Potential Tax Savings

22 August 2018

To Our Valued Clients and Friends:

One of the tax-saving opportunities provided for in the Tax Cuts and Jobs Act, which President Trump signed into law on December 22, 2018, is the creation of “Qualified Opportunity Zones” (QO Zones), and Qualified Opportunity Funds (QO Funds). These funds allow taxpayers to roll over previously recognized capital gains.

These QO Zones represent communities which meet certain requirements as defined in the Tax Cuts and Jobs Act; they are proposed by the individual states, but must be certified by the U.S. Treasury before the potential tax benefits of investment in such zones can be realized.

Recognized gains which would otherwise require payment of taxes due to capital gains on the sale of the investment (such as sales of real estate, stocks, bonds, or mutual funds) can be invested in QO Funds.

Such rollover of capital gains can provide four tax incentives to investors:

  1. Temporary deferral of capital gain from the sale of the original property before investment is made in a QO Fund. Such gains must be invested in within 180 days of the realization of the gain on the original investment,

  2. Possible reduction of the amount of capital gain realized in the original sale (through basis adjustment), up to 15%,

  3. The potential permanent exclusion of the investment that is made in the QO Fund upon the disposition of gain if such investment is held for ten years, and

  4. There is no cap on the amount which may be invested in a QO Fund, provided such investment arises from the gain from a sale or exchange of capital assets.

Since the Tax Cuts and Jobs Act became law, Louisiana has nominated, and the U.S. Treasury Department has approved, 150 QO Zones, including 44 in the New Orleans metropolitan area, 33 in the Baton Rouge metropolitan area, and many more throughout the state of Louisiana.

If you have questions on how and whether investment in a QO Fund would be beneficial to you, please click here to email me directly.

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Until next Wednesday –



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