Rolling stock gains into opportunity zone property
Curious if anyone has successfully done this or it's even possible. Would like to take stock gains and "1031" them into an opportunity zoned property.
[{"id": "gmy6sjf", "text": "How does this work?", "replies": [], "depth": 1}, {"id": "gmya8yt", "text": "My understanding is that gains on OZ properties are tax free but anything rolled into a fund would be after tax.", "replies": [{"id": "gmyc1xt", "text": "You can avoid cap gains tax by funding the QOZ entity within 180 days of the transaction that recognized a capital gain", "replies": [], "depth": 2}], "depth": 1}, {"id": "gmybsvl", "text": "Yes, you can avoid the capital gains tax by using the proceeds of the stock sale to fund a QOZF or QOZBP as long as the investment is made within 180 days from the sale (for an individual)", "replies": [{"id": "gn0997c", "text": "The stock sale proceeds can be used to fund a new QOZF within 6 months. Then the QOZF has 6 months to start a QOZB that buys the QOZBP. The QOZB then has to \"substantially improve\" (double the basis in) the QOZBP within 2.5 years.\n\nThe most helpful how-to I came across [is here](https://www.taxlawforchb.com/2019/02/a-closely-held-qualified-opportunity-fund-its-possible-but-its-not-easy/), but you really should double-check your plans with a good accountant before executing.\n\nQOZ=Qualified Opportunity Zone; F=Fund, B=Business, BP=Business Property", "replies": [], "depth": 2}], "depth": 1}, {"id": "gmys37s", "text": "The capital gains tax is deferred until 2026, and you get a small step up in basis depending on how long you hold. The gains on the opportunity zone property could be tax free depending on holding period as well. You also have to make substantial improvements to the opportunity zone property, so have a plan for that too. Consult a tax professional who is knowledgeable in this area because it\u2019s a whole formal process.", "replies": [], "depth": 1}, {"id": "gn0swnu", "text": "I spoke with the head of major opportunity zone fund a few days ago, says most of his clients come through retail investment channels and are rolling stock gains into his fund. I wasn\u2019t aware this was a play, but seems so.", "replies": [], "depth": 1}, {"id": "gn0tarc", "text": "I was just speaking with my money guy about this. Sounds smart as it\u2019s tax free but sounds like you need to keep in in there for 10 years", "replies": [], "depth": 1}, {"id": "gn78ub3", "text": "You wouldn\u2019t \u201c1031\u201d them but it\u2019s about capital gains. I\u2019ve actually done opportunity zones raises so feel free to DM me if you want more information.", "replies": [], "depth": 1}]