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Real Estate Investor? LBMC Tax Expert Says To Consider the New Opportunity Zones for Tax Deferral


Real Estate Investor? LBMC Tax Expert Says To Consider the New Opportunity Zones for Tax Deferral

Opportunity for temporary and permanent tax deferral

PR Newswire

NASHVILLE, Tenn., July 25, 2018 /PRNewswire/ -- As businesses and Individuals plan ahead to avoid tax pitfalls and take advantage of tax savings opportunities as a result of the 2017 Tax Cuts and Jobs Act, one significant opportunity is a major tax incentive in the form of Qualified Opportunity Zones.

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"Qualified Opportunity Zones (OZs) are a newly created vehicle that may allow the prudent real estate investor to leverage more of their dollars in a tax advantageous investment," says Jeff Talley, LBMC Tax Shareholder and a leader in the Real Estate Tax Division.

What are they?
An OZ is an economically-distressed community where new investments, under certain conditions, may be eligible for preferential tax treatment.

Certain designated localities qualify. They must be nominated by their state and certified by the secretary of the U.S. Treasury.

Check out the interactive map of OZ's (Explore the Map)

What's their purpose?
OZs were added by the recently passed The Tax Cuts and Jobs Act to spur economic development. They are new and have no relation to prior economic incentives.

OZs are designed to encourage long-term investments in low-income urban and rural communities nationwide, and to motivate economic development by providing tax benefits and incentives to investors.

What are their tax benefits?
Through an investment vehicle known as an Opportunity Fund, OZ's provide for both temporary and permanent tax deferral for eligible investors.

  • Investment in an Opportunity Fund provides temporary deferral from other investments without immediately triggering recognition of those gains. The deferred gain must be recognized on the earlier of the date on which the EO investment is sold or Dec. 31, 2026
  • OZ's provide permanent deferral on capital gains if the opportunity fund is held for at least 10 years. The exclusion only applies to gains accrued AFTER an investor makes his/her investment in an Opportunity Fund.
  • A qualified opportunity fund is a privately managed investment vehicle created as either a partnership or corporation for the purpose of investing in Qualified Opportunity Zone property.

OZs provide a very tax efficient vehicle for investors looking to reinvest their current unrealized gains in economically distressed communities and thus escape tax through temporary and/or permanent deferral.

Understanding tax reform and how the changes will affect your business and you as an individual can be challenging.  Talley recommends consulting with a tax advisor who has deep expertise in the multifaceted law and its nuances.

For a more detailed look at the OZ opportunity click here, contact Jeff Talley at or visit

About LBMC
LBMC is a Top 50 firm in the country and the largest professional service solutions provider based in Tennessee. It serves approximately 10,000 clients with diverse needs in financial, human resources, technology, information security, and wealth advisory services across a spectrum of industries. For more information, visit

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