Tax Benefits of Investing in Opportunity Zones

Depreciation Deductions
Significant depreciation deductions over the life of the project
Deductions generally equal 100% or more of investor cash investment within 5 years of the building being placed in service
Deductions generally around 3X an investor cash investment over the depreciable life of the building (30 years)
Depreciation Recapture
OZ investors get the same tax benefits from depreciation as any other market-rate project through the life of the deal, however, OZ investors do not need to recapture the depreciation as additional gains on a sale if held for 10 years – presenting a huge tax savings benefit.
Depreciation Losses
Losses generated by depreciation can shelter other sources of pass-through income for investors on annual basis. Unused losses are also eligible to carry forward to future years.
Deferral of Capital Gains

Any gain treated as a capital gain (including 1231 gains) generated from a sale can be deferred until December 31, 2026 by investing in a QOF. Examples of capital gains eligible for investment in a QOF are: sale of a business, stock sales, and real estate