Opportunity Zone vs 1031

[Lisa Hill]

We may have up to 500k in equity in a rental house that we plan to sell.  I found a multi unit property in an opportunity zone.  Where do I go to find out how the tax deferral works?  I’ve read up on it but am a bit overwhelmed.  Any help appreciated explaining the benefits of opportunity zone vs 1031.  Thanks!

[Natalie Kolodij]

Originally posted by @Carlos Ptriawan:

You need to invest all the capital gains (not just the net sales proceed). Best route is you go to CPA and got your number from them.

100% Tax Deferral if you don't touch the money for 10 years. 10% tax discount if you plan to withdraw on 2026. The last date you can invest in OZ is the end of 2021.

 This is all wrong. 

With a 1031 you need to invest full proceeds- with the QOZ you ONLY need to invest the gain. 

It's not 100% tax deferral at 10 years- Your INITIAL gain is recognized when you sell or at the end of 2026- and at this point you can receive up to a 10% reduciton in that gain. 

Any NEW gains generated in the asset you buy  can be 100% tax free if you hold it 10 years. 

And you can absolutely invest after 2021 you just lose some of the benefits.