With this year’s strong stock and property markets, figuring out how to minimize capital gains tax may be top of mind for investors. Qualified opportunity funds can provide tax advantages, but acting fast makes a difference: You can reap the benefits of three tax perks instead of just two if you invest by year-end.
What is a qualified opportunity fund?
In 2017, the Tax Cuts and Jobs Act established a new tax perk allowing investors to defer and minimize capital gains taxes when reinvesting capital gains into qualified opportunity zones, which are economically depressed regions within the U.S. Qualified opportunity funds invest in businesses or properties within qualified opportunity zones, offering that preferential tax treatment to the fund investors.