Hirschler tax partners Dave Lionberger and Jamie Canup have been quoted extensively in a Hotel Management article on qualified opportunity zones. The article examines what the zones mean for hotel investors—and what opportunity may actually be available.
Lionberger and Canup highlight three major tax benefits from investing in a QOF: First, the taxpayer can defer capital gains from the sale of any nonqualified-opportunity-zone asset sold to an unrelated party. Second, if the investment in a QOF is held by the taxpayer for at least five years, the basis of the investment is increased by 10 percent of the original deferred capital gain and if held for seven years, the basis is increased by an additional 5 percent. Lastly, if the investment in the QOF is held by the taxpayer for at least 10 years, the basis on the investment in the QOF is increased to the fair market value of the investment at the time it is either sold or exchanged. This means that there is no capital gain recognized on the sale of the investment in the QOF.
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