Wiser Wealth: Using Opportunity Zone Funds To Revitalize Distressed Communities While Minimizing Capital Gains and Estate Taxes


Abandoned Storefronts on Avenue of the States
Image via Creative Commons.
Avenue of the States in Chester.

As proposed changes begin to come down the pipeline for how capital gains taxes and estate taxes are handled, it has many wondering what they can do to mitigate what they will be paying.

As explained by Matthew Erskine of Forbes, some of the ideas being considered by the government could wind up claiming up to 75% of the value of any estate worth more than $3.5 million.

One method to avoid losing such a large chunk of the assets for an estate could be to utilize a Charitable Lead Trust. This puts assets into an irrevocable trust where a charity will receive payments out of the trust for as long as the creator wants.

However, at the end of that term, the assets are transferred to whoever you prefer, including your children. And the beneficiary will receive any appreciation of the value in that trust free of any estate taxes.

However, the most intriguing option for some may be how Qualified Opportunity Zone Funds can help. This program is designed to incentivize investing assets into distressed communities by offering tax relief for the investors.

For one, this gives you permanent exclusion on being taxed for capital gains related to selling or exchanging the Opportunity Fund if you have had it for at least a decade. In addition, the basis of your capital gains is increased by 10% if you hold the Opportunity Fund for five years, and then another 5% for holding it a total of seven years.

Fred Hubler, president and founder of Creative Capital Wealth Management Group, a wealth management firm in Phoenixville, a good Qualified Opportunity Zone Fund does all the work for an accredited investor. “They won’t need to be the developer they just need to invest into the developer’s fund, according to Hubler.

“For many people trying to lower their equity positions in the stock market these types of opportunity funds could be the answer,” said Hubler.

If you see the tax proposals that are developing and feel the loss of your money is inevitable, you might just need more knowledge about what your options are.

For more detail on how to minimize what you will pay in estate and capital gains taxes, be sure to read the article from Forbes here.


Fred Hubner

Want to know if you’re on the right path financially? Fred Hubler’s Second Opinion Service (SOS) is a no-obligation review with Creative Capital Wealth Management Group‘s Chief Wealth Strategist. It’s simply not possible to get a reliable second opinion from the same person who gave you the first one. Click here to schedule an SOS meeting.



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