qualified opportunity zones advanced techniques for ...€¦ · qof or 1031 – i sold a $1m sfr...

Welcome to

A Collaborative Wealth Management Company

Qualified Opportunity Zones Advanced Techniques for Building Tax-Free Wealth

Gregory BannerPresidentAsset Preservation Strategies, Inc.

(858) 455-1825GregBanner@Asset-Preservation.comwww.Asset-Preservation.com

Financial Advisors of Asset Preservation Strategies, Inc. offer securities through Arete Wealth Management, LLC, aRegistered Broker/Dealer Member FINRA/SIPC/NFA. Advisory services offered through Axxcess Wealth ManagementLLC., an SEC Registered Investment Advisor. Tax services offered through Asset Preservation Strategies, Inc. AssetPreservation Strategies, Inc., Axxcess Wealth Management LLC., and Arete Wealth Management LLC. are unaffiliated.John L. Jenkins, CA Insurance License #0647708. Gregory R. Banner, CA Insurance License #0B64761.Monica Szakos, CA Insurance License #0I76089. Zaira Espinoza, CA Insurance License #0K33230. JanetSilva, CA Insurance License #0L15756. James Fogelstrom, CA Insurance License #0L51265..

Aman BadyalPartnerCKR Law

(619) 500-4540abadyal@ckrlaw.comwww.ckrlaw.com

This presentation is for educational and informational purposes only and is not intended and should not be construed aslegal advice.

Overview• What is a QOZ?• Why is it

important to me?• Planning

Opportunities• Case Studies

What is a QOZ?

• QOZ was created by TCJA to create incentives for taxpayers investing in economically distressed communities

• Set up as a partnership or corporation for investing in eligible property

• Must hold 90 % of assets in QOZ property

What is a QOZ?

Investor Benefits• Deferral of Capital Gains• Reduction of Taxes• Exclusion of Future Gains

• How much can I invest in a QOF? (Amount of cap gains realized in the past 180 days)

• What assets can I invest in? (Certain Equity, Real Estate and other tangible property used in a QOZ), substantial improvement.

• Where are QOZ’s located? (Governor designated and Based on 2008 census data)

• https://www.cims.cdfifund.gov/preparation/?config=config_nmtc.xml

Why it’s important to me!• Huge legitimate tax-planning and wealth

generation opportunity• Tax-planning opportunities• Business, real estate and investment

planning opportunities

Case #1I sold my business (stock sale) for $10M with $1M basis

• 2019 $9M realized gain

• 2027 up to $1.82M Fed taxes payable on $7.65M gain at 23.8% LTCG+NIIT

Case #2I sold my $1M QCOM stock with $100k basis invested $900k in QOF apartment complex

• 2019 $900k taxable gain

• 2027 $182k Fed taxes payable

• 2029 $900k invested in QOF sells for $2M. Taxpayer receives step-up in basis to FMV of $2M with no taxes

Case #3QOF or 1031 – I sold a $1M SFR investment property with $200k capital gain, no loan and $800k basis

• Investor could pocket the $800k basis tax free and invest the $200k in a QOF owing future taxes only on the $200k and paying no tax on the future sale of the QOF.

• Compliance?• Third party fund vs. my own fund?• State non-conformity?• Liquidity planning issues?• What if I want to sell early?• What is substantial improvement?• Tiered partnerships to reduce

investment in a QOZ

Questions and

Discussion

THANK YOU FOR ATTENDING

On Behalf of

GregBanner@asset-preservation.com(858)455-1825

abadyal@ckrlaw.com(619) 500-4540