Wiser Wealth: As New Years Approaches, Some Opportunity Zone Benefits Are Poised to Expire

By
Philadelphia Reflections
Image via lys28 on Reddit.

In recent years, more people have been turning to opportunity zone funds to invest in due to the variety of appealing tax breaks they offer. However, very soon, one of those tax breaks is going to be disappearing, and it is causing a rush of new investors clamoring to get involved before they miss out.

Bisnow recently put out a post on how on the very first day of 2022, new investors will no longer receive a 10% reduction on their deferred capitals gains taxes. Seeing as this benefit has been part of the investment deal since it was originally created in 2017, many are understandably not happy about this change.

However, analysts have been quick to assuage concern over the severity of this decision. The tax perk will certainly be missed, but opportunity zones will still continue to offer their other, more significant benefits.

For one, investors will continue to see the perk of not having to pay any taxes on any of their capital gains if they keep the opportunity zones investment for at least a decade. That potential to be able to get some untaxed income will continue to make this a very tempting option for people.

Fred Hubler, Chief Wealth Strategist for Creative Capital Wealth Management Group has been using opportunity zones since they were authorized. “We’ve been using opp zone strategies to help clients sell equity gains at record highs and defer the tax on those gains.”

“The opp zone strategy we are currently using is a national program that takes dormant big-box retail stores (think Kmart and the like) and turns them into storage and distribution centers,” says Hubler

Still, as opportunity zones become more popular with investors, it is interesting to see what modifications to the proposal are developing. According to Bisnow, in just the first half of 2021 alone, qualified funds raised over $17.5 billion.

That number will no doubt grow in part because of this last-minute rush of new investors before 2022. However, it remains to be seen if the loss of this one tax perk causes any slow down in newcomers as the new year gets underway.

To learn more about what is set to change when these benefits expire, check out Bisnow’s post by clicking here.

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Want to know if you’re on the right path financially? Fred Hubler’s Second Opinion Service (SOS) is a no-obligation review with Creative Capital Wealth Management Group‘s Chief Wealth Strategist.

It’s simply not possible to get a reliable second opinion from the same person who gave you the first one. Click here to schedule an SOS meeting with Fred and his team.

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