Opportunity Zones

Qualified Opportunity Zones (QOZs) are economically distressed communities where new investments may be eligible for deferred and reduced taxes on capital gains. These benefits can be realized when gains are reinvested in a Qualified Opportunity Fund (QOF): a corporation or partnership established specifically to invest in projects in QOZs.

Investors in QOFs can have significant tax advantages, including:

• Recognition of capital gains is deferred until Dec. 31, 2026, or until the investment is sold, whichever is earlier.
• Investors are eligible for exclusion of 10% or 15% of their deferred gain if the QOF investment is held for at least five or seven years, respectively.
• Gains on QOF investments held for at least 10 years are eligible for 100% exclusion.

Since the inception of the program in December 2017, KSM consultants have helped structure deals of all shapes and sizes. And because we know there is more than one way to structure a deal, we will work with you to understand your ownership group, your motivations, and the most advantageous situation for your QOZ investment.

Services include:

• Expert guidance throughout the creation and maintenance of your fund
• Advice on how your fund complies with asset testing rules
• Help identifying and vetting projects that meet QOZ qualifications and ongoing status monitoring
• Research on the availability of additional economic incentives for your investment
• Ongoing reviews to identify gains to be deferred under QOZ rules
• Review of partnership and contribution agreements with regard to federal and state taxes
• Tax reporting, advice, planning, and preparation services

QOZs are a great way for investors to gain tax benefits – while helping grow great communities. Contact KSM today to learn more about how we can help you get started.