1. While you can use any capital to invest in Opportunity Zone Funds, the only way to get the full tax benefits is if you use capital gains earned by selling an asset (business, stocks, real estate, etc.) in the previous 180 days.
2. Tax deferral is not the same as tax exemption. You’ll be able to defer the capital gains tax on the capital you invest until December 31, 2026, which means you will need enough liquid cash on that day to pay those taxes. You will be exempt from the capital gains tax on any gains you earn from your investment, provided your money is held for the full ten years.
3. Remember this is an investment first, and a tax plan second. Being a Qualified Opportunity Fund is the cherry on top of what should be a strong commercial real estate investment.