What Are Opportunity Zones?
The Tax Cuts and Jobs Act of 2017 included a section entitled the Investing in Opportunity Act. This new law created what many are saying could be the biggest tax break in U.S. history, the creation of what are known as “Opportunity Zones”. The Act allowed the governors of each state and heads of all U.S. territories to designate certain areas in their states and territories as “Opportunity Zones”. Each Opportunity Zone has to be in an area that is economically distressed based on certain census criteria. All fifty states and U.S. territories participated and created over 8,700 Opportunity Zones.
The stated purpose for the creation of Opportunity Zones is to attract private investment into economically distressed areas throughout the country via significant Tax Deferral, Tax Reduction and Tax Forgiveness treatment of these investments. It is estimated that there is $6.1 Trillion in paper profit capital gains just in the U.S. stock market. Much more than that is tied up in the value of small businesses and real estate.
There is very little government oversight provided in the Act. The Treasury and IRS are empowered to issue regulations to better define what the Act means but there is no IRS approval needed in any area. Instead, the Act sets up an easy to implement self-election format that allows literally anyone to take advantage of the Opportunity Zone opportunity.
Defer, Reduce and Eliminate Capital Gains Taxes
Opportunity Zones are designed to encourage long-term investment into distressed communities, so the longer you keep your money in an Opportunity Zone investment the larger your tax benefit. The tax breaks occur after the 5th, 7th, and 10th year of your investment.
- Deferral: If you sell an appreciated asset such as stock or real estate and make an Opportunity Zone investment, you can defer recognizing the capital gains tax until December 31, 2026.
- Reduction: If you sell your investment after 5 years 10% of your original deferred capital gains tax is excluded from taxation. And If you sell your investment after 7 years, 15% of your original deferred capital gains tax is excluded from taxation.
- Forgiveness: If you sell your investment after 10 years, you can exclude 100% of the gains that you have made on your Opportunity Zone investment forever.
A tax savings solution for your appreciated stock portfolio with an investment in an Opportunity Zone you can defer and reduce the capital gains tax on your stock and potentially eliminate all of the gains realized from your Opportunity Zone investment.
A liquidity solution for your real estate portfolio you can sell your real estate, retain your non-taxable basis to fund your lifestyle and invest the appreciated portion of the sales proceeds into an Opportunity Zone investment. You can’t do that with a 1031 exchange.
- Diversify your portfolio with real estate. You can choose where to invest geographically from properties around the country, as well as the types of properties you want to invest in.
- Invest in real estate without any of the management responsibilities associated with real estate ownership.
Are you interested in investing in income producing properties?
- Collect monthly income to enjoy the golf course or take the dream vacation you’ve always wanted. Real Estate investing can be extremely rewarding financially, especially when your gains are tax free! If you are looking for a strategy to eliminate or reduce capital gains taxes on your stocks or the sale of your highly appreciated income property, investing in an Opportunity Zone Fund may be the solution you have been waiting for.
Are you a current landlord tired of the responsibilities and dealing with the Terrible Ts?
- The terrible T’s are what an active manager of real estate, or a landlord is responsible for including toilets, tenants, trips to Home Depot, termites, and time spent. Many people like being real estate investors, but do not like being a landlord, have the time to spend on it, have the skill sets necessary to do it well, or have the energy.
Are you looking for an easily divisible asset to leave your heirs?
- Opportunity Zone investments can remove the temptation of liquidating assets too quickly.
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About APO Financial
“We thoroughly vet each Opportunity Zone investment opportunity and as fiduciaries we are legally obligated to always act in your best interest”
APO Financial was formed by John Goodhue and Brian Gray in 2008 with a focus on retirement planning after each of them separately watched their parents experience negative financial consequences in retirement as a result of the recession. John and Brian have learned that paying unnecessary taxes can be the single most problematic issue for anyone’s financial plan. Therefore tax efficiency planning is a central focus for the firm. As such, APO Financial strives to stay abreast of the latest unique tax mitigation techniques.
The entire team of people at APO Financial works hard every day to bring our clients the latest financial opportunities and cutting-edge retirement planning concepts and methodology. Our goal is to help each retiree feel secure and happy knowing that their retirement plan has been designed to protect them.
Brian is a nationally recognized Financial Educator, Author, SAPOer and Financial Planner, whom you may have seen in or on NBC, ABC, CBS, and FOX network affiliates and Fortune, Money, Bloomberg Business, Kiplinger, Wall Street Select, Market Watch, Denver Business Journal, Denver Post, Yahoo Finance and others. Also, heard him as the premier financial guest on KHOW 630AM’s daily show The Troubleshooter with Tom Martino. Gray is the Co-Author of “Smiling Through Retirement” and “Giving Transforms You” to be published in the first quarter of 2018. He has been interviewed by Kevin Harrington, original Shark on the multi EMMY® Award winning TV series, Shark Tank, and by James Malinchak, featured on ABC TV’s Hit Series, Secret Millionaire. He also interviewed such notables as Country Music star Martina McBride and renowned economist Roger Ibbotson
Brian enjoys spending quality time with his wife Ashley. They like to travel, learn about different cultures, play golf and scuba dive together. He strongly believes that everyone should complete their dreams within their bucket list window. Brian co-created The Smiling Through Retirement Process™. He is passionate about planning and sharing his financial wisdom and insights.
John is a nationally recognized Financial Educator, SAPOer and Author, whom you may have seen as a guest many times on financial shows such as CNBC’s Squawk Box and Power Lunch as well as heard him as the premier financial guest on KHOW 630AM’s daily show The Troubleshooter with Tom Martino. Goodhue has recently coauthored his second book on advanced strategies to reduce income taxes and eliminate estate taxes. He is the creator of the Smiling Through Retirement Process and has been interviewed by Kevin Harrington, original Shark on the multi EMMY® Award winning TV series, Shark Tank, and by James Malinchak, featured on ABC TV’s Hit Series, Secret Millionaire. They also interviewed such notables as Country Music star Martina McBride and renowned economist Roger Ibbotson
He has conducted over 400 presentations across the country on topics including Zero Tax Planning, Baby Boomer Retirement, The New World of Defined Benefit Plans, and Tax Smart Retirement Planning. Thousands of CPAs, attorneys and financial professionals and others have benefited from his instruction. His published articles include How Strong Are Your Financial Pillars and 5 Ways to Lower Stress & Anxiety in Retirement. They have appeared in Fortune, Forbes, and CNNMoney, among others.
John advises wealthy individuals and families from coast to coast. His counsel and assistance has saved them millions in estate and income taxes. A Summa Cum Laude graduate of Eastern Kentucky University and the University of Kentucky College of Law, John and his wife, Mary, live in Denver with their eight children and grandchildren.
John is a warm and gifted communicator who has a passion for helping people think about their wealth from a new perspective… showing them how they can leave a legacy of not just their money, but also of their values and significant influence in their community.
If you’ve ever heard Ray sAPO at any of the dozens of classes he teaches annually, you likely have heard a portion of the childhood events that shaped his life. His parents divorced when he was 4 years old and Ray was raised by a single parent who was plagued by drug and alcohol addiction. A broken family and financial hardship early in life created a drive in Ray to truly value what matters in life – family and helping others.
Today, Ray is a nationally recognized Advisor, Author and SAPOer whom you may have seen in NBC, ABC, CBS and FOX network affiliates and Bloomberg Business, Yahoo Finance, Investing Daily, Wall Street Select, Market Watch among others, however, if you ask Ray, his most proud accomplishments are his marriage to his high school sweetheart and becoming a father.
Ray is the Co-Author of Smiling Through Retirement ™ : The Importance of Living Your Life in Five Year Increments and Co-Creator of The Smiling Through Retirement Process ™. As an Advisor, Ray and the team at APO Financial Inc., show business owners, professionals and executives how to preserve, protect and pass on their wealth.
Ray co-created The Smiling Through Retirement Process ™ out of his passion to help people more fully enjoy their hard-earned wealth. He knows through personal experience guiding both clients and family through retirement that there are many pitfalls that can cause tremendous pain and regret in retirement, but also many opportunities that can lead to fulfilling life.
A native of Colorado, Ray is an avid musician, skier and proud father. He attended the Leeds School of Business at the University of Colorado Boulder and graduated with a degree in Finance. Ray and his wife Arisa and their son enjoy spending time in the beautiful Colorado outdoors.
To be an accredited investor, an individual must have had earned income that exceeded $200,000 (or $300,000 together with a spouse) in each of the prior two years and “reasonably expects the same for the current year,” according to the SEC.
Or, the individual must have a net worth of more than $1 million, either alone or together with a spouse. With the passage of the Dodd-Frank Act, this now excludes a primary residence as being eligible as part of an investor’s net worth (investors who had existing accredited investments but who now fail the net-worth test without their residence being valued were grandfathered).
The information, suggestions, and recommendations included in this material is for informational purposes only and cannot be relied upon for any financial, legal or insurance purposes. APO Financial will not be held responsible for any detrimental reliance you place on this information. It is agreed that use of this information shall be on an “as is” basis and entirely at your own risk. Additionally, APO Financial cannot and does not guarantee the performance of any investment or insurance product. Insurance products are offered through APO Financial, a licensed insurance agency and affiliate of Horter Investment Management, LLC. APO Financial and individual advisors affiliated with APO Financial and Horter Investment Management, LLC receives commissions on the sale of insurance products. Clients are not required to purchase insurance products recommended or to otherwise implement financial advice through APO Financial affiliates. Horter Investment Management, LLC is a registered investment adviser with the SEC. Our registration with the SEC or with any state securities authority does not imply a certain level of skill or training. Opportunity Zone investments are only available to accredited investors and are offered solely through the issuers offering documents. The Opportunity Zone sponsor determines whether to accept any individual’s subscription documents.