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Qualified Opportunity Zones
Invest in the #1 Opportunity Zone*
Opportunity Zones can truly transform underserved communities while also maximizing real estate capital gains. Whether you’re a seasoned real estate investor or just starting, we can demystify this incredible tax deferral strategy while growing your wealth and passive income. Before we get into the specifics about OZ’s and how you can benefit, here is what sets re-viv’s opportunity fund ahead of the rest.
- The Oakland, CA market has continually ranked in the top 5% for rent growth annually since 2010.
- 20-35% Net Operating Income (NOI) premiums relative to traditional multi-family investments.
- Higher cash on cash yield (3-6+%) relative to traditional, Bay Area multi-family.
- Starting rents for tenants are 15-20% below the market rate for a studio in the same neighborhood, with no subsidy. All while providing a superior product.
- Built energy efficiency and to green building standards (true to our founder’s roots).
*Oakland was ranked the #1 Opportunity Zone according to Fundrise.
Why utilizing Opportunity Zones is so important:
It’s buying power with a social element
It’s buying power with a social element
An investment in re-viv’s Opportunity Zone in Oakland could return between $125-$175k more than investing in the stock market, buying your own real estate deal or investing in a non-OZ syndication. Here’s how.
Let’s take a simple $100k gain, fantastic! However, depending on the state you live-in you could be subject to rates as high as 39%. If you invest in our fund you could make significant returns compared to a non-OZ investment.
Need this broken down? Then either contact us at the link below or book an appointment here to speak with our principal.
re-viv OZ fund VS Non Oz
Opportunity Zones are designed to spur economic development by providing tax benefits to investors.
What is an Opportunity Zone?
An Opportunity Zone is an economically-distressed community where new investments, under certain conditions, may be eligible for preferential tax treatment. Localities qualify as Opportunity Zones if they have been nominated for that designation by the governor of the state. That nomination has been certified by the Secretary of the U.S. Treasury via the delegation of authority to the Internal Revenue Service.
Opportunity Zones allow investors to defer capital gains from other asset sales (cash and non-cash) to transfer them into an IRS Opportunity Zone, potentially eliminating capital gains altogether when held for 10 years.
Any investor who has a qualifying capital gain is eligible to invest in an Opportunity Zone fund or investment vehicle. By doing so, you will defer your capital gain and can decrease the taxable amount of one’s capital gain by up to 15%. Taxes will be due on the capital gain in the year 2026, but should you keep your investment for the full 10-year period, any appreciation above and beyond your initial investment is not subject to taxes.
For more information on the subject, check out a recent webinar on capital gains and opportunity zones with our Principal, Matt Ryan below!
The Opportunity Zone Life Cycle
- Capital invested in Opportunity Zone Fund (2020) within 180 days from the date of the previous investment’s sale, or capital gain is recognized.
- Funds deployed and property improved within 31 months (2021)
- OZ Fund to stabilize, refinance, and distribute funds (12-30 months)
- Pay tax on original capital gain. Tax liability is reduced by tax reduction of 10% (2024)
- Maintain your investment for 10+ years and you pay no capital gains on the appreciation of your investment. (2029+)
Opportunity Zones v 1031 Exchange
1031 exchanges and Opportunity Zone real estate investments each have unique tax advantages that can shelter and grow your wealth. However, all too often investors force themselves into a deal that doesn’t provide a great return. Below is a quick breakdown of Opportunity Zones and 1031 exchanges.
Opportunity Zones v 1031 Exchange
1031 exchanges and Opportunity Zone real estate investments each have unique tax advantages that can shelter and grow your wealth. However, all too often investors force themselves into a deal that doesn’t provide a great return. Below is a quick breakdown of Opportunity Zones and 1031 exchanges.
1031 Exchanges
Opportunity Zones
Can I take gains from a sale of business or stock?
No
Yes
Timeframe to place money
45 days to identify (3) three properties. 180 days to close on one of those three.
180 days to invest in an Opportunity Zone fund.
When do I pay my tax?
You will not pay tax on your replacement property until you sell that property. When you sell your replacement property. You will need to complete a 1031 exchange again or pay the tax on any new gains.
You will pay 90% of the tax due on 12/31/2025. If you hold the investment for ten years, you pay no additional taxes on the appreciation of your replacement property or investment fund.
Replacement property
No, you can only use proceeds from disposal and you must monitor funds in order to purchase a replacement property.
Yes, any funds can be used.
Filing taxes
For the year of the sale of the property, a single IRS Form 8824 must be filed.
You must report annually via IRS Form 8996.
Investment location
Reinvestment in a particular region of the U.S. is not required, as long as it is in the U.S.
It has to be in a qualified zone.
Invest and reinvest
There are strict guidelines and time limits for property recognition when investing: 200 percent rule, (30) three-property rule, and 95 percent rule.
And when reinvesting, the total value and equity amount must be reinvested.
You can invest in any valid QOF and you’re only required to reinvest the gain amount.
Can I defer?
You are entitled to defer capital gains on disposition property indefinitely.
Yes
Benefits from purchases?
May benefit by purchasing any like-kind property. There are almost no rules in terms of a replacement property.
Can only benefit from purchases of qualifying property. There are several rules to comply with at acquisition and throughout hold term.
Opportunity Zones FAQ
Localities qualify as OZs if they have been nominated for that designation by the state and that nomination has been certified by the Secretary of the U.S. Treasury (via his delegation of authority to the Internal Revenue Service)
- Long and short term capital gains
- Gains from a 1031 exchange
- Gains from the sale of property
- Gains from the sale of personal assets
- Gains from stock sales
- Gains from business assets/sales
Investors can defer tax on any prior gains invested in a Qualified Opportunity Fund until the earlier of the date on which the investment in a QOF is sold or exchanged, or December 31, 2026. If the QOF investment is held for longer than 5 years, there is a 10% exclusion of the deferred gain. If held for more than 7 years, the 10% becomes 15%. If the investor holds the investment in the Opportunity Fund for at least 10 years, the investor is eligible for an increase in basis of the QOF investment equal to its fair market value on the date that the QOF investment is sold or exchanged.
No. You do not need to live in, work in, or operate a business in the Opportunity Zone where you will invest.
Opportunity funds have a minimum of 30 months to invest their working capital in qualified opportunity zone property.
Yes, you may defer the gain, in whole or in part, when filing your federal taxes. You may make the election on the return on which the tax on that gain would be due if you do not defer it. For additional information, see “How To Report an Election To Defer Tax on Eligible Gain Invested in a QOF” in Form 8949 instructions.
Yes. If a taxpayer’s section 1231 gains for any taxable year exceeds the section 1231 losses for that year, the net gain is a long-term capital gain. A taxpayer can elect to defer some or all of this capital gain under section 1400Z-2 by making an investment of a corresponding amount in a Qualified Opportunity Fund. This must be done during the 180-day period that begins on the last day of the taxpayer’s taxable year.
Source: IRS Opportunity Zone rules
DISCLOSURE: The above information should not be construed as tax advice. No warranty is made that an investment in Re-viv’s OZ Fund 2 will qualify as an eligible investment in an Opportunity Zone fund or that any individual investor will realize the potential tax advantages described above. Investors should consult with their own legal and financial professionals to understand the potential tax implications and benefits of an investment in Re-viv OZ Fund 2.
Source: IRS Opportunity Zone rules
DISCLOSURE: The above information should not be construed as tax advice. No warranty is made that an investment in Re-viv’s OZ Fund 2 will qualify as an eligible investment in an Opportunity Zone fund or that any individual investor will realize the potential tax advantages described above. Investors should consult with their own legal and financial professionals to understand the potential tax implications and benefits of an investment in Re-viv OZ Fund 2.
Learn about our current OZ projects, and discuss your situation.