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Updated about 3 years ago,
Opportunity Zone Investing as a way out of a live-in investment
I want to make sure I understand the nuances correctly before making this suggestion to to my better half, so hopefully BP can give me good advice about this and make sure I'm thinking through the repercussions correctly.
TL;DR My wife hates living in the South and wants out ASAP and our owned primary residence doesn't come anywhere remotely close to cashflow potential, so how do we leave before the 2 year mark while also avoiding a hefty inflation-induced capital gains tax bill?
If I understand this correctly, one way we COULD do this is sell our primary residence and move into a rental house back west (we moved to Richmond from Portland OR area last fall), and within 180 days of the sale do the following: a) start an LLC as a QOF with the both of us to invest in a property in an opportunity zone (we've already identified a potential area of investment and investment strategy), and b) purchase an investment house or condo in said opportunity zone. At that point, we're free to live wherever we choose to in the area, don't pay capital gains on the sale as long as we keep the investment property within the rules of the Opportunity Zone guidelines, and get to both gain equity and slow down the timeclock on finding a new property. Is it worth all this trouble (and potential fees to do a QOF right) to save 15-25k in taxes? Would like some perspective on whether this is even accurate, and if it is, has anyone out there done this?