Broker Check

The Qualified Opportunity Zone (QOZ) program

March 29, 2024

The Qualified Opportunity Zone (QOZ) program, born out of the Tax Cuts and Jobs Act of 2017, offers a special chance for investors to snag some tax perks by putting their money into communities in need, as identified by the IRS and the U.S. Treasury. These designated zones span across all 50 states, plus Washington D.C., and U.S. territories. Investors can tap into the program's benefits using two main tools: Tax Deferral and Tax Elimination.

Tax Deferral with QOZs:

Unlike some traditional tax breaks, which usually favor real estate investors using 1031 exchanges, the QOZ program is more inclusive. It lets investors defer capital gains taxes on the sale of all sorts of assets like stocks, bonds, even your grandma's prized jewelry, by reinvesting the profits into a Qualified Opportunity Fund (QOF), the special fund for QOZ investments. Transactions made between December 22, 2017, and December 31, 2026, can snag tax deferral benefits, giving investors a chance to hold onto their gains and let them grow in the QOF until January 1st, 2027, before taxes come knocking.

Tax Prevention with QOZs:

Here's where it gets interesting: If you stick with your investment in a QOF for a solid decade, you get a nifty step-up in basis to the current market value. Translation: Say goodbye to new capital gains taxes on any upticks in your investment's worth. This setup gives investors a rare shot at shielding their gains from tax on the growth of their investment held for a decade or more, giving their returns a nice boost.

Deciding If QOZ Investment Is Right for You:

For those with a long-term investment outlook and some cash to play with, the potential tax benefits of QOZ investing can be a real game-changer. The Qualified Opportunity Zone (QOZ) program offers investors a unique opportunity to defer capital gains taxes and potentially eliminate taxable gains on investments made in designated economically distressed areas. However, determining whether a QOZ investment aligns with your long-term financial goals requires careful consideration. Consulting with our team can provide valuable insights and guidance to help you make informed decisions about incorporating QOZ investments into your portfolio.

Scott Offerman helps investors navigate obstacles and fix problems which commonly occur during a Real Estate Investment Sale utilizing a 1031 Exchange.

Scott Offerman


1031 Financial

Cell: 917-887-0166

By Appointment Only

321 West 44th Street, Suite 200

New York, NY 10036