Put Your Capital Gains to Work
Opportunity Zones are designated, under-capitalized areas within the US that could benefit from economic development and job creation. The program provides investors with qualifying capital gains benefits in the form of tax deferral, reduction and elimination through investment in ground-up real estate development and redevelopment.
What are the Opportunity Zones?
Opportunity Zones By The Numbers
- KCensus tracts designated as QOZs
- $KMedian income
- $BCapital raised
- %Income growth
Which Gains Are Eligible?
Many types of capital gain are eligible for Opportunity Zone deferral, including stocks, bonds, commodities, partnership K-1s, business sale, real estate, personal residence, cryptocurrency and art
- Stocks, Options
- Partnership K-1s
- Business Sale
- Real Estate
What Are The Tax Benefits?
Investors can defer the payment of capital gains taxes until 2026 by rolling realized gains into a Qualified Opportunity Zone ("QOZ") Fund
Virtually any capital gain qualifies (stocks, bonds, K1 partnership gains, or entire business)
Capital gains generally need to be invested in the QOZ Fund within 180 days of the sale that generated the capital gain
Investment in the QOZ Fund becomes completely free of capital gains tax after 10 years, as the basis is increased to match current Fair Market Value
Among other qualifications, assets in the QOZ Fund must be:
- Put to new use or
- Substantially improved by investing at least as much as the original purchase price
QOZ Fund must invest at least 90% of its assets in a QOZ
State Taxes and Incentives
Deferral and Forgiveness of Capital Gains Tax in Most States (excl. CA, NY, NC, MA, MS)
State and municipal development incentives (e.g. fast track approval)
Opportunity Zones can be effectively combined with other tax credit programs (e.g. historic preservation or affordable housing)
What Are The Conditions?
Three Basic Conditions of the Opportunity Zone Program - Well Aligned with GTIS Strategy and Experience
Invest in designated QOZ locations
8,700 Census tracts covering a variety of underserved areas
GTIS Qualified Opportunity Zone Fund II is a direct continuation of GTIS investment strategy and focus on areas undergoing transformation
Experience in Opportunity Zone Markets – GTIS had committed over $180m of equity to projects located in Opportunity Zones prior to inception of the QOZ program in 2017
Invest in ground-up development or substantial redevelopment
Cannot simply acquire existing cash-flowing properties
GTIS team and strategy focused on ground-up development since the firm’s inception in 2005
In-house development capabilities plus joint ventures with 30+ local development and construction partners
Hold investment for a minimum of 10 years to deliver long-term benefits to the community
Maintain QOZ certification status, complex reporting requirements
GTIS has an established fund management platform investing on behalf of some of the world’s largest pension plans and wealth managers with extensive reporting, institutional-style fees and governance
What Is The GTIS Opportunity Zones Strategy?
Single Family Rental