Of the many changes that came from the Tax Cuts and Jobs Act
("The TCJA"), Qualified Opportunity Zones
("QOZ") have been one of the most talked about provisions
as the 2018 tax season progresses. As a recap, through QOZs,
taxpayers may elect to temporarily defer the tax to be paid on
capital gains until the 2026 tax year that are invested in a
Qualified Opportunity Fund ("QOF") within 180 days of
gain recognition, the QOF must invest 90 percent of its capital in
QOZ Property. Taxpayers who hold investments in a QOF for at least
five years may exclude 10 percent of the original deferred gain,
and investments held for more than seven years qualify for an
additional five percent exclusion of their original deferred gain.
In what could be the most attractive feature of the new law, after
10 years, post-acquisition appreciation is 100 percent excluded
from taxable income for federal tax purposes. Many states are still
evaluating how they are going to deal with the new QOZ
