Qualified Opportunity Funds: A new weapon in the estate planning arsenal

Posted by Kim Chen on March 15th, 2020

Interested in tax-wise estate planning? Qualified Opportunity Zones depend on investments in Qualified Opportunity Funds (QOFs). Investors can defer capital gains on the disposition of appreciated property by reinvesting the gains in a QOF within 180 days of disposition. Tax is deferred until the QOF investment is sold or Dec. 31, 2026, whichever is earlier. By incorporating QOFs in estate planning, you can reduce capital gains and transfer tax liabilities. For example, you could transfer a highly appreciated asset to an irrevocable trust with no gift tax under the 2019 $11.40 million gift and estate tax exemption. The trust could sell the asset and defer the gains into a QOF investment.