Alright, welcome. We're going to jump into Opportunity Zones.
So, with, with this tax law.
And with a lot of tax laws, there's so many moving pieces.
Like, we, this is what I've done with a lot of episodes.
We could dive into it. We into hours and hours of,
of the details in the tax code sections and every single possible detail you
could think of. And we'd have an hour or two hour long episode and
you'd probably fall asleep. And if you're driving,
I don't want you to fall asleep at the wheel. So,
what we're going to do, I've gone through the details.
I'm going to, at a high level, this is, this is, this episode is
for investors, real estate investors,
this is for business owners. This is for crypto,
crypto owners. This is for people selling stock.
This is for people that are real estate. If you have a capital gain,
and you're worried about paying tax on it, and you're also interested,
potentially, in investing in real estate,
some sort of real estate, this episode is for you.
This is what Opportunity Zones are.
So I'm going to give you what I feel like are the,
like, the The key opportunities and the things that could really drive impact
to you and your wealth and your tax savings.
without diving into every single possible detail,
but I will be throwing because, because of how important it is,
you need to understand. Understand some of the details because there's very specific dates
and very specific processes and things to follow.
In order to qualify for an Opportunity Zone investment and really the tax savings
behind it. Okay, so.
I'm going to break it down into two major components.
The first one is the current tax rate. Like,
current tax year, what are the benefits to you in,
in, investing? Investing in an opportunity zone,
and then I'm going to talk about the long-term benefits.
So as I'm bringing up some of these key dates and details,
you're going to notice there's some current benefits and the long-term benefits.
And then, another part of this is that there are,
there were some major changes, um,
from how the law works in 2026.
Thanks. Compared to 2027. So in the middle of 2025,
July 4th, we had the one big, one, big, one,
big. Beautiful Bill Act that was signed into law,
which was a ton of different tax laws. There was that law that was
signed. A bunch of changes were planned to take effect,
but this one with Opportunity Zones. Thank guys. Okay.
Those real changes are taking effect January 1st,
2027. But there's some, there's some very- specific timing things
that you could consider as we're talking about the different, um,
the differences. So I will- bring up a little,
like, some of the old law. So if I'm referring to the old law
compared to the new law, that's what it's referring To that change on July
4th, 2025. And the timing of when that change takes place.
Okay. Okay. So to start jumping back, the key main components of what of,
of what I want to break down is why would you even.
And consider this and, and who, like,
who might want to consider an opportunity as an investment.
So first, I'm going to give you some scenarios. The people,
like the who, like the person,
you, when you're in a specific- scenario,
this is when you might want to use it. It's when you have,
when you realize a capital- Happening. A capital gain,
or when you have, when you're reporting a capital gain in a tax year,
and you don't want to pay tax- taxes on it. That's, that's the person
that opportunities owns could benefit. And you want illegal- way to not pay
taxes on it. Or at least defer taxes on it into a future year.
here. And if you sell anything to,
and so to clarify, this is different from.
from. It's not just real estate,
even though in the end you could end up in real estate.
In the beginning, you can sell. So, anything and so qualify for this.
Business, this is for business owners. If you sell a business through planning and
exit, That's it. And you, you're going to have a chunk of cash.
You're going to have some sort of payout. You don't want to pay 20
to 30 to 40%. to that to the government,
uh, in the form of taxes.
This is a potential way to save on that. So if you sell it
business. is business, if you sell, if you sell real estate,
this can work as well. If you sell cryptocurrency.
currency. If you sell stocks,
if you sell anything that's causing a taxable,
like. Good. That's causing capital gains.
Now, I was going to say taxable income. It's not any tax income.
If you sell anything that costs. It causes taxable gains,
like capital gains, then this is when it could work.
. . . . because typically how it works,
if you don't do anything, if you don't do any planning with it,
say you sell a business As you all know,
I like to just throw out examples, but it'll give you a very specific
example. So, you sell a business. Thank to us.
And say you, like,
you didn't buy that business, you started it from scratch,
you grew the business. This is, Let's say you sold that business for a
million bucks. If you sell that business for a million dollars,
say you get a million dollars, a, cash today, when you file your tax
return next year, so April, 2027,
you're going to, No tax on that, because you realized the capital gain,
you had a sale, um. You have a reported
sale, reportable transaction,
taxable income, which is, is a capital gain.
And assuming you had the business for more than a year,
it's gonna be long term capital gain. Okay. And on a million bucks,
your capital gain tax rate on the federal side is gonna average- remember out
to be about 20%. And then you got state tax on top of that.
Let's just say it's about 5%. And ahead and motion. And motion. Okay.
Okay. And see, you know, about $250,000 in taxes.
So sure, you got a million when you sold the business.
this. But the end of the year, when you file a taxes next year,
you're left with $750,000 a cash.
Because $250,000. $250,000 of it went to taxes.
So to save you $250,000 here.
Here's what an opportunity zone does.
You can defer the tax on that sale.
You Or you can defer having to pay tax on that by investing
the million dollar so it's a game. However much gain you have,
if you put that into an opportunity zone investment and I'll break down.
I don't know how I'm supposed to say that. Typically what would qualify for
an opportunity zone investment here soon, but it would be some sort of real
estate. Right? And we hope to see I'm going the And video.
Into a fund or into a property that you manage or it could be
someone, uh, one that someone else manages. changes.
You put it in there and when you file your tax return the next
year, your tax bill would be.
Please. Zero. There is some,
there's some, I mentioned earlier,
like the old versus the new. Tax law.
There are some key changes here with that because if you sell
it. That's good. That's good. Right now, in 2026,
you sell it before the 4th of July,
2026. 6. Under the old tax law that's
expiring, that tax law that expires at the end of this year.
Thank you. Umm,
you could defer, you could technically defer the gaining into an opportunity to own
an investment, but because of the timing. Things in the way this new tax
law works, you're going to have to pay tax on that anyways in 2026.
So it's, Kinda weird, but if you were to do that five years ago,
you wouldn't have to pay tax on that until 2026. So it's unique
under the old law, under the old rule.
If you sell something in the first six months of 2026,
watch out because you're under the old law. and we're going to rules before,
again, July 4th, 2026, you're under the old rules and you're gonna have to
pay tax on it 2020. I'm going to, 26, so you're not getting the
upfront tax savings, the upfront tax deferral that is very,
beneficial for opportunities on investments.
So I wouldn't say, like, you've already sold something.
I'll see you're, you've got 180 days,
so about six months to get it into the opportunity zone investment.
Like, that ship is already- Like, you've already got the cash,
you've already realized the gain. You,
you'll still, you'll apply under the old rules. Rules.
8 You've got to pay tax on it when you file 2026 taxes.
Uhm,
but actually if you s- sold it in 2025,
it could buy you at least one year. But if you sell it in
2026, you re gonna pay taxes on it this year.
you're in. Anyways, umm,
so it really brings you to the second, the reason you would- Muffin'.
You might still want to get into an opportunity zone investment is because of
the second major component, and I know there's so many pieces.
To this, but I do want to reference what the second major component is.
The second major benefit of an op- opportunity zone investment is if you keep
that property for 10 years,
like. like. at least 10 years and you don't sell it for the first
10 years, but then you sell it after that point. All the gain on
the. We'll be back. Property, while you kept it for those 10 years,
all that new gain is going to be tax-free.
100%. I'm what we're do. Tax-free on the new gain,
so if you rolled, you sold, like,
you had your million dollars a gain, you went and bought a million dollar
property. Bye. You've realized if it's under the old law,
you gotta pay tax on it when you file your 2026.
Thank you very 6 taxes. So when you're filing a 2027.
But now, and so it's like that was the upfront.
Front. Gain. There's not a huge benefit.
You're just kind of delaying it a year. But after 10 years,
if you sell that. You say it's now worth two million dollars.
So you bought it for a million. You did pay tax on the first
million, but that- second, the new growth for the ten years while you owned
it, there's no tax on that growth.
That- That's it. That's the other major benefit to this.
Um, but there is something- there's something really exciting about- the,
um, this new tax law is that you've got those same benefits.
If it's, Umm, you've got an upfront deferral.
But now instead of just a 2026,
just a, like a cat, Y'all like everyone asked to report taxes on 2026,
like the old law was. This new law is,
you don't, You have to pay taxes on your initial gain for five years.
It's deferred for five years. Either until- If you sell the property,
if you sold that after two years, you'd have to pay the gain on
it. Or if you keep it for at least five years,
you pay taxes. That first part of the tax set for five years,
then if you keep it for the ten years, you have,
like, that, that. New growth in the ten years,
just like the old law, you don't have to pay any tax on the
new growth. So the new law, I like the new law better.
better. It's a lot more clear in your planning and it's like a,
it's a perpetual one. It keeps resetting every year.
So you get. If you did it every year, you've got five years to
defer the tax on the game. Um,
so it's, they're still- It's even better.
It's a much better tax law now under this,
this 2027 law. So hopefully that- makes sense,
but there's- there's a lot of moving pieces there.
So just remember the two major components there.
There. There. Uh, some key dates,
just to remember, related to opportunities and own investments.
I'll talk about the dates- . And then at the end, I'm going to
talk about, like, exactly and specifically what qualifies for an opportunity zone.
And there's- a lot of different variations of- of types of properties and types
of real estate you might want to get into. Thank you. But the key
dates, like just timelines. So once you sell something,
and you realize the game- that's the reportable transaction.
Like, something happens, the exchange funds,
umm, with an opportunity zone of- investment,
you actually can receive the cash as compared to
a, like, a 10, 31- exchange. You can't access the money.
10, 31 exchanges are different. That's a whole different thing,
but there are some similarities, but. But, Uh,
uh, Opportunity Zone gained deferral and future investment.
You can get the cash, and you have a hundred, and eighty days from
when you sell it and get the cash. You have a hundred and eighty
days to decide if you're,
You can invest into an opportunity zone and actually deploy the cash or get
that cash, that cash trans, effort out of your name and into an
opportunity zone fund. So,
180 days there, And then remember,
there was the five-year under this new rule. You've got the five-year with this
new law. He got this five-year rule. So after five years of when you
defer the gain, you've got to pay tax. next.
on whatever the initial gain was that you deferred.
And then there's the ten years, after ten years of when you make the-
. investment, the new tax, or the- the new gain on that,
it can be sold after that point and it's a hundred percent. So just
remember though, there's other dates and stuff, but those are the key 180 days,
five years and ten years, as long as you understand. And those rules under
the new law, it's going to make a lot of sense.
And I think you'll, you'll see some opportunities there. So,
that, And now, the last part that we'll cover,
let's cover the, like, what qualifies for an opportunity zone.
So, if you, So, like,
if you go to Google, or chat TPT,
or Grok, or wherever you want to go search,
Search for Opportunity Zone Map,
and you'll see a lot of companies, like a lot of different companies,
Sometimes they're raising funds for. Opportunity Zones.
They'll show you the areas that qualify for Under Opportunity Zones.
So, 5, 6... Or I guess more,
like, 7, 8 years ago when they created the slot in the first place.
And I'm going financial analysis, financial and the Okay. Federal government worked with the
state governments and they got together and they identified areas.
is in each state that they,
it's really the state government where they wanted more development.
Sometimes it's a little more rural areas, sometimes it's a little more areas that
a little more rundown. Like, it's areas where they want to promote the government's
incentivizing people to invest in these areas.
They want- new development. Like,
they want real estate built. They want real estate bought.
They want real estate managed. They- New They want money going into those areas.
But if you go to the- do the search, like I mentioned,
you can go find these map. Yeah. If you go to, I think it's
maybe HUD, like the government website,
but there's a government website that has them. It's like Google Maps,
you can zoom in and see specifically which streets and neighborhoods and which areas
of color they're at. But that's 2026.
2027,
they're going to be redo- doing the maps. There's some,
some new rural opportunities. And we think they're going to be redrawing the maps
a little. But under the old law, currently in 2026,
your investments are still under the old maps.
So I'd go look at the map. Uhm,
but remember, it's real estate or businesses.
Actually, that's another opportunity you can, you can be like, uhh, real estate or
businesses in these areas designated by the government specifically outlined
in our interpreter. Whatever. Whatever color it is, make sure you're buying in those
areas. So now once you've identified the area.
you now there's a couple different ways you can actually get into these opportunity
zones. So one. one. Uh,
so it needs to be in an opportunity zone fund,
which a fund is really,
it's really just an- No. LLC, an LLC that files a tax return as
a partnership, and we have clients.
science. I've actually done one myself, like,
and we file for them every year, taxes for them every year.
Umm. time. So, where you could set it up yourself,
it could be you and a spouse, it could be you and a friend,
it could be- You do in your corporation like you could have your own
fund if you wanted and you wanted to own and control and manage your
real estate yourself. That's completely possible or a little more common
what we find as our clients are investing into fun.
That are already managed, professionally managed by other people.
Uh, either way, the tax,
the tax. Come. Tax benefits are the same, you get the gain deferral up
front, down to the new law for the five years,
and then after the ten years. It can be sold tax free on the
new game. But remember, you can do it yourself.
You could go, like, hey. Great. Down the street from me,
that's an opportunity zone. I want to form an LLC.
I want to buy that specific property. You can do that if you want
to be involved in that. If you're just kind of getting out of real
estate, or you want to get out of the management of it, you can,
use a professionally managed company or a company that's raising funds specifically
for opportunities on investments. The company. So that's the,
the, a couple, you've got a couple ways to do that for sure.
So there are even like this is a long.
A little bit longer episode for what I typically do,
but I don't want to just bury you in details. be ready and we'll
see you We'll see you Thanks for help. I'm hoping that is enough details
so you can start thinking about what potential investments or opportunities you might want
to do. Especially for people that don't want to pay tax on capital gain
and legally don't want to have to pay tax. Thanks.
And they want to get into another investment. Remember the $1,000,000 example I gave
you on the gain? This is instead of paying $200,000,000.
50,000 dollars of tax. This is rolling the gain into,
uhm, ehm, ehm. an opportunity zone investment,
which could be real estate or a business in those areas.
is. And something to think about is as you,
as you're looking for the investments. adjustments.
Or as you're not only looking for the investments,
but as you're planning for taxes, we do a lot of tax projections.
questions. You can do partial,
like, partial carryovers or partial deferrals of your income.
Thank So, there's some fun you can have with,
like, planning for tax brackets. You can go, oh.
Well, I- I could defer- I could put $100,000 into this opportunity
zone, but maybe keep the- another 100 and just pay tax on it because
I'm in the lowest tax bracket. So there's- there's some games you can play
which- . . . legal games and- and things you can do with the
tax law, uh, to really benefit you because I know you don't always- people
don't always want to, yeah, put all- all their cash from a sale of
something into the business, but with opportunity zones, it is flexible.
Okay, that's- that's the end of it. what. If. If you- yeah,
you've got specific questions on this. Uhm,
yeah, I'll definitely cover them in the World Game Alliance call.
So nice. Uh, where you can get the- the questions submitted there through the
AI tool, and we're gonna- we're gonna be starting up the bi-weekly- calls here
in the next couple weeks. Now that we're kicking off 2026,
be- ah, please feel free to- Yeah, get your questions submitted there,
and yeah, good luck with you looking into opportunities,
own investments, and have a- Have a great rest of the day.
See ya. So, thank you.
