Illustrative Opportunity Zone Program Tax Deferral Timeline
“2019Asset Sale
Investor has $10.0MM capital gain”
“March 2019Year Zero
Investor invests $10.0MM into QOF within 180 days of capital gain realization
Tax deferral begins and basis in QOF is set at zero”
“March 2024Year Five
Basis in QOF increased by 10.0% to $1.0MM”
“March 2026Year Seven
Basis in QOF increased by an additional 5.0%, a total of 15.0% to $1.5MM”
“December 31, 2026
Tax deferral Period Ends
Mandatory tax payment
Basis in QOF increased by an additional 85% to $10.0MM”
“March 2029Year Ten
If investor sells interest in QOf after ten years, investor’s basis in the investment is deemed to be the fair market value
The effect would be no tax on the appreciation of the investment”