How Long Will Opportunity Zones Last?

How Long Will Opportunity Zones Last?

SUMMARY: If you think of investing and living in lower-income areas, then opportunity zones suit you. You can invest in stocks, partnerships, interest property, and any other that qualifies.

Text Last year was a big year for opportunity zone investors, qualified opportunity zones funds, and real estate developers. However, there are several deadlines you need to know if you have made such an investment. Some investment deadlines have passed, but a basis stepup deadline hasn't passed. Below is a brief breakdown of all the deadlines.

Opportunity zones have become an investment alternative that attracts many investors.

However, due to this fact, Congress is considering raising capital gain taxes from 20% to 39.6%. It has led to investors waiting eagerly to allot valued capital gains into tax-free vehicles. In opportunity zones, you don't have to pay taxes to invest. In the future, it's going to be at a 39.6% rate which means that it will be a good gain.

If you invest capital gains in a qualified opportunity zone, you can delay capital gains liability. You have a duration of up to 31 December 2026 to lower tax liability on the initial gain by 10% and remove tax on any capital gains. It applies to opportunity zone investment that has been held for ten years.

The Period QOFs will last.

To understand how long the QOF will last, here is a breakdown: 

All the qualified gains from 2021 can be invested on a rolling yearly basis.

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All the acceptable capital gains acknowledged in 2021 must be invested by 28 June 2022.

Acceptable capital gains that have been acknowledged in 2022 must be invested by 28 June 2023.

All acknowledged capital gains in 2023 must be invested on 27 June 2024.

All capital gains acceptable and acknowledged in 2024 should be invested on 28 June 2025 All acceptable capital gains in 2025 should be invested by 28 June 2026 On 31 December 2026, all deferment on initial gains ends, and the gain is acknowledged.

On 15 April 2027, all income taxes for 2026 are due and include tax payment due on your original deferred gain.

On 28 June 2027, the latest you can invest 2026 capital gains. It also comes as a final deadline to invest in QOZF for the ten-year gain exclusion.

In 2028 this will be the first year all the earliest opportunity zone investments might be sold and enter the 10-year gain exclusion.

On 31 December 2028, this marks the expiration date of the designation of Qualified Opportunity Zones. However, QOZFs might still be operational after this date to be added to the ten-year exclusion.

28 June 2037 marks the last date for the last Opportunity Zone investments to be sold and be in the ten-year exclusion. It applies to deferred gains invested into a QOF from 2026 to June 2027.

Note the 10-year gain exclusion will end on this date for deferred gains invested in QOZF from 2026 to 28 June 2027. If the investment has been maintained for 10 years, it can now be sold. 

31 December 2047, it will be hard to stop gains on taxpayers' QOF investment with the expiration of QOZ designations.

It's time to use the tax gains and invest in opportunity zones. However, ensure you know the deadline to investment and the selling of the investment.