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Author: varlordahl1

Opportunity Zones Provide Extraordinary Opportunity for Capital Gain Minimization and Tax-Free Growth

Buried in the 2017 Tax Cuts and Jobs Act is the creation of “Opportunity Zones.” Opportunity Zones were designed to spur investment in economically disadvantaged areas in each of the 50 states.  Investing the gain proceeds from a capital transaction into an an Opportunity Zone provides two extraordinary tax benefits: (1) deferral of the original gain until sale or December 31, 2026 (whichever is earlier) and if the investment is maintained for at least five or seven years, then 10% or 15%, respectively, of the original basis becomes “stepped-up;” and (2) if the investment is maintained for at least 10 years, any gains in excess of the pre-contribution gains inside the Opportunity Zone investment are never recognized.  Think of it as a capital gain deferral and a partial basis step-up, combined with Roth IRA-style growth and distribution potential.  Investments can be made directly into Opportunity Zones, or they can be made via a contribution to “Qualified Opportunity Fund” – many of which are currently being formed all over the country. Though treasury regulations regarding Opportunity Zones are still being drafted, it appears that Opportunity Zones will become a powerful tool to achieve tax efficiency on the sale of capital assets while simultaneously spurring long-term economic investment in distressed areas. For more information, please contact Var E. Lordahl in the Las Vegas, Nevada office at...

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Tax Cuts & Jobs Act of 2017 – Last Minute Tax Planning

Given the passage of the Tax Cuts and Jobs Act of 2017 (the “Tax Act”), many taxpayers may wish to engage in last-minute tax planning prior to January 1, 2018.  In fact, certain taxpayers may see significant and immediate benefits in doing so. For taxpayers subject to state and local income taxes, a prepayment of future income tax liabilities can lead to an immediate 2017 deduction of all taxes paid.  The Tax Act, beginning in 2018, will significantly curtail the state and local tax deduction. Additionally, a taxpayer who currently itemizes deductions on the taxpayer’s personal tax return, but who may not meet the anticipated $24,000 standard deduction threshold (for a married couple) in 2018, may wish to accelerate any planned charitable contributions into 2017 to ensure a full deduction in 2017. Additionally, other potential 2017 tax deductions, such as certain expenditures that constitute “Miscellaneous Business Expenses” and certain customer entertainment expenses, will be limited or phased out in 2018.  Here too, prepayments may provide significant tax benefits. As always, before engaging in any of these techniques, consult with your personal tax advisor or feel free to reach out to any of the tax practitioners at Dickinson Wright PLLC. For more information, please contact Var Lordahl in the Las Vegas, Nevada office at...

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Tax Blog is published by Dickinson Wright PLLC to inform the public of important developments within the firm and practice areas. The content is informational only and does not constitute legal or professional advice. We encourage you to consult a Dickinson Wright attorney if you have specific questions or concerns relating to any of the topics covered in this blog.