Jay Frank, COO, Cantor Fitzgerald Investment Management spoke with Julie Cooling, Founder & CEO, RIA Channel to discuss opportunity zones and how those with substantial capital gains over the last few years still have time to leverage them as a tax-advantaged solution.
The Qualified Opportunity Zone Program (QOZ), introduced as a part of the Tax Cuts and Jobs Act in December 2017, offers sizable tax benefits for any individual or entity investing in job creating actives in lower income communities across the United States.
After more than three years since the program rolled out, hundreds of funds have emerged and an estimated $100 billion in assets have flowed into QOZs. “You are really starting to see the fruits of our labor, you’re seeing projects coming out of the ground, cranes in the air and business get started,” says Frank on the economic impact of QOZs. Investors with sizable capital gains in 2019 and 2020 still have time to reap the tax benefits of opportunity zones. The recent IRS 2021-10 Notice, passed on the last day of Trump’s administration, allows any individual or entity with a capital gain on any type of asset going back to October 2019 to invest in qualified opportunity funds until March 31, 2021. The potential tax benefits include, tax deferral, reduction, and elimination. Going forward, investors have 180 calendar days from when they realize a gain, to do an OZ investment. Not all opportunity zone funds are created equal. Frank stresses the importance of starting with great real estate and an experienced manager. Noting that ultimately, “The tax benefits are based on the long-term success of the investment.”
Cantor Fitzgerald is large global diversified investment manager, specializing in real estate and is an early adopter of the Qualified Opportunity Zone programs. The 75 year old firm completed $72.3 billion in real estate transactions in 2020 alone and in the last decade has invested more than $2 billion in its commercial real estate business infrastructure. Cantor Fitzgerald’s real estate platform offers broad access to critical market data and research, enhanced ability for diligence and underwriting, and superior deal flow enabling the ability to deliver institutional quality real estate investments to investors.
Additional Resources
Investing in the Zone: Introduction to Qualified Opportunity Zones
A Solution for 2019 and 2020 Capital Gains: There is Still Time
Qualified Opportunity Zone FAQ