With high investor interest in potential tax savings though the opportunity zones program in the 2017 tax law reforms, National Real Estate Investor turned to Gerald Thomas, chair of McGuireWoods’ Tax & Employee Benefits Department, for a Q&A.
With deadlines for optimizing tax benefits fast approaching, 2019 is a pivotal year for investors to jump into opportunity zone funds. The story noted that McGuireWoods quickly launched a multipractice opportunity zone team distinguished by the economic development and infrastructure skills of McGuireWoods Consulting.
Thomas said that the ability to defer capital gains potentially to 2026 for investments in funds that back projects in economically challenged areas — opportunity zones — makes them one of the best deferrals out there right now.
Investors, however, need to do their due diligence before committing to a fund, he said. They should know where the fund intends to invest and how the fund is structured. For instance, he said, is the fund making a one-time investment or numerous investments? A fund that’s not properly structured won’t yield the tax benefits investors expected, he noted.
“An Opportunity Zone fund is only as good as its legal counsel,” Thomas said, recommending that investors check the reputation of the fund’s attorneys.