Taxes From A To Z 2019: O Is For Opportunity Zone

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Taxes From A To Z 2019: O Is For Opportunity Zone
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It’s my annual Taxes from A to Z series! This time, it’s Tax Cuts and Jobs Act style.

If you’re wondering whether you can claim home office expenses or whether to deduct a capital loss under the new law, you won’t want to miss a single letter.Under the TCJA, new investments in some economically-distressed areas may be eligible for preferential tax treatment. To qualify, areas must be nominated by the state and certified by the Secretary of the U.S. Treasury. Opportunity Zones exist in all 50 states, the District of Columbia and five U.S. territories. Here’s how it works.

Here’s the attraction to a QOF: investors can defer tax on any prior gains invested in a QOF until the investment, including stock and business property, is sold or exchanged, or December 31, 2026, whichever comes first. The longer the investment is held, the better. If the QOF investment is held for longer than five years, there is a 10% exclusion of the deferred gain, but if the QOF investment is held for more than seven years, there’s a 15% exclusion of deferred gain.

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