Article by Jasmin Severino Hernandez and Christopher Steele on “Window of opportunity for opportunity zones may be closing"
In an article published by Accounting Today on May 5, 2021, Chamberlain Atlanta-based Shareholder Christopher Steele and Associate Jasmin Severino Hernandez discuss the tax benefits of qualified opportunity zones which allow investors to redirect some or all of their unrecognized capital gains into underserved, economically distressed communities in exchange for tax breaks assuming certain requirements are met.
“Despite COVID, the real estate, private equity and M&A markets either held steady or continued to grow in 2020 and the first quarter of 2021,” explain Steele and Severino Hernandez. “As a result, more taxpayers are holding or will be holding realized but unrecognized gains.”
Steele and Severino Hernandez further explain that while they would prefer taxpayers have a discussion around the tax consequences of a deal long before the deal closes, the reality is that this is rarely the case. Whether before or more likely after the closing of a transaction, taxpayers are scrambling to look for ways to defer and reduce long-term capital gains.
“While the economy is continuing to create a boom on QOZs, recent buzz around an increase in long-term capital gains rates may cause many taxpayers to reconsider QOZs,” conclude Steele and Severino Hernandez.
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