Everyone knows it is smart to invest, but plenty of people are unaware of the best options available to them for getting the maximum payoff. The one thing all investors dread is when they eventually have to pay the taxes on their investments, but you might be surprised to know there is one option that comes with major tax breaks.
Qualified opportunity zone investments will help you retain far more of your earnings than what you would get from stocks, but there are a few catches to be aware of. In an article for Forbes, writer Betty Friant delves into the details of these investments.
The basic idea is that instead of investing in the stock market, you are instead investing in impoverished areas to help give the residents there some assistance. And it turns out the government really wants you to help out with this cause, to the point they are offering some pretty generous tax relief incentives for people who participate.
If that sounds too good to be true and you are wondering what the catch is, the most important distinction is that you have to remain committed to the investment for quite a while to receive the tax breaks. To be exact, you need to stick with it for ten years if you want to reap the full perks.
That might sound like a big ask, but your patience will be rewarded by not paying anything at all in taxes on your profits. Regardless of how much your investment grows over that decade, if you leave it untouched for that entire time, it is all yours to enjoy afterward. For people willing to bide their time, that is a pretty good deal to enjoy down the road.
However, just like with stocks, there is also no guarantee you will make money. That is why you really want to do your research with this to ensure you have something to look forward to down the road.
If you simply want to be altruistic and help out the community, that is great too. But if you want something back for yourself at the end of it all, consult your financial specialist to gain some more insight into the reputation of the sponsor behind the investment property of whatever community you are considering.
If you have additional questions about these investments, be sure to read the original article from Forbes here.
In our next NoonZoom happening on December 7th, Fred Hubler, Chief Wealth Strategist for Creative Capital Wealth Management Group will share 5 wealth growth strategies, including Qualified Opportunity Zones, he has learned from his nearly two decades of working with high-net-worth individuals and families.
He will also share investments and strategies that are only available to accredited investors as well as some new spins on existing strategies.
Click here to learn more and register to participate.