Wiser Wealth: What You Need to Know About Investing in Qualified Opportunity Zones

Woman checking on her investments

If you have heard about the tax incentives for investing in qualified opportunity zones, you have likely been intrigued to learn more. But for the uninitiated, it can be a lot to learn at once.

Kiplinger ran an article with a lot of good information on the subject, with these being some of the key points that can help you figure out if it is right for you.

In essence, investing in a qualified opportunity zone means you are lending your financial support to a neighborhood that is struggling economically. The government’s hope is that investors like you contributing support to these areas will enable them to start to flourish.

However, this is not a charity where you are putting in money with no expectation of anything back. To encourage you to help, the government is offering significant tax advantages. Specifically, you would usually have to pay taxes on the gains that your investments see.

However, for investments in qualified opportunity zones, if you keep your money in the project for at least a decade, you get to keep any gains on the investment 100% tax-free.

Fred Hubler, Chief Wealth Strategist for Phoenixville-based Creative Capital Wealth Management Group, a wealth management practice that services families in 28 states and specializes in retainer-based planning and alternative investment strategies, use opportunity zone funds for his clients. “We’ve been selling stocks,” said Hubler, “that have been “in the money” and using the opportunity zone fund strategy to defer the gain and also expose our clients to ground-up real estate development.”

Hubler also notes opportunity zone funds can help defer taxes on real estate sales. “Not every real estate transaction needs to use a 1031 to defer taxes” Hubler states.

Obviously, that is a long-term commitment for your investment, but if you are thinking of a fund to help support your retirement or what you leave to your children, it is an appealing option. And though the neighborhoods being invested in are struggling, the firms you would be putting your money into would have a solid history of success. This is not intended to be a huge gamble for the investor.

It is expected that some of the terms for dealing with qualified opportunity zones will change within the next five years, so if this sounds appealing to you, now is the time to do your research. Investing now could have a big payoff if you are patient.

If qualified opportunity zones sound like something you want to know more about, read the article from Kiplinger here.


Want to know if you’re on the right path financially? CCWMG’S Second Opinion Service (SOS) is a no-obligation review with one of  Creative Capital Wealth Management Group‘s Wealth Strategists. 

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