TCJA Tax Deferral Vehicle

[Lee B]

"The Tax Cuts and Jobs Act created a section of the Tax Code that allows taxpayers to take advantage of a new investment vehicle called Opportunity Funds. The purpose of this new investment vehicle is to help direct resources to low-income communities, known as Qualified Opportunity Zones, through a more market-driven approach."

At first I assumed that this would never apply to one of my clients. However as I read the this article in Tax Pro Today, I realized that in the right situation,

significant tax deferral plus actual tax saving  could be realized. First a taxpayer can create their own Opportunity Fund and second the taxpayer self-certifies

with the IRS that their fund meets the requirements. This is big because other vehicles in the past required the involvement of third parties who, of course,

charged very high fees, which meant that only the very wealthy could justify participating. This strategy appears to be actually useful for any taxpayer

willing to reinvest capital gains for 5 years or longer. I actually have 2 or 3 clients that might interested.  For more details, click on the link:

https://www.taxprotoday.com/opinion/opportunity-zones-an-innovative-investment-vehicle-created-by-the-tax-cuts-and-jobs-act?feed=00000158-3f5d-dcbd-abf8-ff7f12270000

 

 

 

 

[JohnH]

With all due respect, it seems to me to be something just slightly less complicated that a MLP,  but with a mind-boggling holding period before any real benefit MIGHT be realized.  Anything that appeals to perceived tax savings to make it somewhat profitable isn’t an investment - it’s another form of gambling. But it will likely appeal to people who will jump on almost any financial scheme  (no matter the risk) if it mentions any prospect of escaping taxes. 

[Richcpaman]

Interesting....

Now I know why Ford has bought the old Michigan Central Terminal in Detroit.

Rich