How the Opportunity Zones and Qualified Opportunity Fund

Can Benefit You & Wisconsin

Have you sold an appreciated asset in the past 180 days, and realized capital gains tax liability as a result? Have you wanted to sell an appreciated asset, but the capital gains tax liability was too cost-prohibitive to do so?

 

If the appreciated asset is real estate, you may be able to leverage a 1031 exchange to avoid a capital gains tax bill. However, that requires quickly identifying a similar property and reinvesting 100% of the proceeds into the new property. What if the appreciated assets are stocks or bonds or other forms of assets that are subject to capital gains taxes? Well, you likely have to pay the tax collector following any sale…until now.


The federal legislation that authorized Opportunity Zones and Qualified Opportunity Funds really had two beneficiaries in mind: communities in need of greater economic development and you.


Opportunity Zones are federally designated census tracts providing substantial tax-favorable treatment for individual and institutional investors who invest realized capital gains in businesses and properties in those zones for an extended period. Investors
now can:

 

  • Unlock the capital gains in their appreciated assets;
     

  • Invest the capital gains through a Qualified Opportunity Fund (think of it as a private equity fund with substantial tax benefits), putting the money to work for several years before paying any capital gains;

  • Reduce any capital gains associated with the initial investments sold; and

  • Pay as little as $0 in capital gains taxes for appreciation related to long-term Opportunity Zones-based investments.

It is a win-win-win! The investor receives extraordinary tax benefits and the ability to earn a return. Entrepreneurs and other business owners gain access to additional capital needed to build quality companies, commercial spaces, and multi-family housing. Individuals and families in neighborhoods benefit from increased jobs, housing, and businesses. Overall communities and the State of Wisconsin as a whole become even better places to live, work, play, invest, innovate, and thrive.

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This website is intended for general information purposes. This website is not intended to provide any accounting, legal, regulatory, tax, or investment advice or recommendations. No information contained on this website constitutes an offer, or a solicitation to buy or sell any security or fund in any jurisdiction.

Investing in real estate and/or privately held businesses involves a substantial degree of risk. There can be no assurance that the broad investment objectives described herein will be achieved. Investment losses may occur, and investors could lose some or all of their investment. No guarantee or representation is made that any of the investment programs related to Badger State Opportunity Fund, LLC or Wisconsin Diversified Investments, LLC will be successful, and investment results may vary substantially over time.