Defer capital gains tax – not just on real estate sales
Of course, we are big believers in the tax benefits of a 1031 exchange when selling real property with a gain. Having thus said, if a property owner opts to forgo a 1031 exchange or misses a deadline resulting in a failed exchange, there is another alternative: investing the sales proceeds into a Qualified Opportunity Fund (“QOF”). This tax-saving vehicle is not just a 1031 alternative, but available to anyone selling an asset which will result in a capital gain; for example, the sale of a business, stock or bond. A taxpayer with capital gains can defer capital gains tax if they sell their appreciated assets and, within six months, roll over the profits into a QOF.