Opportunity Zone w/ Cash - No CG Deferral

[Aaron Moayed]

Can the OZ benefit be applied to an investor that's just using cash to create the fund vs. rolling over/deferring capital gains tax from some other REI sale? I.e., cash from scratch in fund vs cash from REI proceeds...? I'd assume the 10% and 15% reduction in CG wouldn't be applicable, but I'm wondering if the 10+ year hold would lead to zero capital gains tax.

[Ashish Acharya]

Originally posted by @Aaron Moayed:

Can the OZ benefit be applied to an investor that's just using cash to create the fund vs. rolling over/deferring capital gains tax from some other REI sale? I.e., cash from scratch in fund vs cash from REI proceeds...? I'd assume the 10% and 15% reduction in CG wouldn't be applicable, but I'm wondering if the 10+ year hold would lead to zero capital gains tax.

You do not get the preferred treatment for the normal investment. Only the capital gain gets the preferred treatment. 

If your investment include both capital gain and other investment(most of the investment do), they are tracked as two different groups to apply the preferred treatment to only the cap gain group when you exit or report the gain.