Opportunity Fund & Capital Gains question!

8 Replies

Currently infatuated with opportunity funds and in dying need of ideas to manufacturing capital gains other than Real Estate, Stocks, Bonds, and Mutual Funds. An idea that I've been brain storming is to sell my car that I bought for next to nothing and now is worth about 10k more than what I paid for it. Would that be considered capital gains and if so could I cash out on other vehicles, campers, ATV's, boats, etc. that are worth much more than I purchased them for?  

@Eamonn McElroy if possible yes. I would only roll the gains into the opportunity fund, the remaining would go back to buying those same toys, vehicles, etc. being that I buy at such a discount. Do you have of any suggestions or help for me or just criticism?

Originally posted by @Jeffery Olaru :

could I cash out on other vehicles, campers, ATV's, boats, etc. that are worth much more than I purchased them for?  

How many of those do you have? If you're a reseller, then these sales do not generate capital gains. 

Read the definition of capital assets:
https://www.irs.gov/publications/p544#en_US_2018_publink100072479

@Michael Plaks I have 2 cars(Honda purchased 11/2018 & Ford 09/2019) and 1 camper(purchased 11/2019) that I’d be interested in selling due to the highest capital gains to roll in to an opportunity fund. My concern is that I haven’t held on to them long enough and I might run the risk of being a reseller even though I have never resold anything like that for gains before.

Btw I’ve been a fan of yours since I saw you knock out Uncle Sam at the Quest Expo😂. My wife and I actually took a picture with you.

@Jeffery Olaru

Sure, my advice is that you speak with your financial advisor and tax professional.

I assume you've calculated the ROI of the opportunity fund through the lifecycle of the investment and realize the risks that come with investing in these asset classes. Would you mind sharing what ROI you've calculated on the particular funds you're looking at, adjusted for taxes and the time value of money?

@Jeffery Olaru

Ha - it was a great networking event. 

You will not be a reseller for these vehicles, because 3 is too few, and you did not buy them with an intention to resell quickly. Short-term capital gains are eligible for QOZ funds, so no problem here.

As far as "manufacturing" more capital gains - no suggestions. You can sell what you already own if you do not need those items or can easily replace them. But buying something else in order to resell for capital gains is breaking the rules.