Individuals with sizable capital gains are looking for proactive solutions to address their taxable event, reported Cantor Fitzgerald.
The tax benefits fall into three categories: deferral, reduction and elimination.
DEFERRAL — Generally, if a taxpayer invests the capital gain from the sale of a qualifying asset into a qualified opportunity fund (QOF) within 180 days of recognizing the gain, taxes on such proceeds may be deferred until the earlier of Dec. 31, 2026, or when the qualified opportunity zone program (QOZ Program) investment is sold.
REDUCTION — If a taxpayer invests an eligible capital gain into a QOF prior to Dec. 31, 2021, and holds the investment until at least Dec. 31, 2026, the amount of the gain on which taxes are owed is reduced through a step-up in basis equal to 10 percent of the original gain amount invested in the QOF.
ELIMINATION — Investors who hold their QOF investment for at least 10 years, pay no tax on its appr