Advanced Taxation Question Related to Opportunity Zones
Hello everyone! I believe this is my first post.
Let me start by saying that I will ask my CPA these questions, but I want to know what I’m talking about a little better first so I’ll know exactly what to ask.
This year, I completed my first flip and netted about $26k before taxes.
Earlier this week, I bought a rental (singlewide with land) for $15k, and I’ll put in about $3k to replace the septic lines and that’s it. Both the flip and the rental are near Wilmington, NC.
Listening to a BP podcast earlier today, I learned about Opportunity Zones, which I’ve never heard of before. I then looked up my local Opportunity Zones, and it turns out that both my flip and my new rental are in opportunity zones. With that said, here are my questions:
1) Am I understanding correctly that I will not have to pay any capital gains taxes on the rental if I keep it for at least 10 years? (The trailer is on a permanent foundation and deeded with the land as real estate.)
2) Is there a way my CPA can consider my $18k investment in the rental as coming from the $26k flip profit so I won’t have to pay income tax on that $18k?
3) Are there any other creative tax solutions that I could utilize this tax year since the flip and rental are both in Opportunity Zones?
Thanks!
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#4 All Forums Contributor
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#4 All Forums Contributor
- CPA, CFP®, PFS
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1) no
2) no
Just buying a property in a OZ doesn’t mean anything. Also, only cap gain can be deferred, not ordinary flip income.
there are 10s other requirements needed to properly establish and operate the OZ fund.
- Ashish Acharya
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