- A75620DF51EBEABB656E21C323A4B669
New YorkNew YorkNew York 40 Wall Street, New York City, USA +1 212 660 2285 Mon - Fri 10:00-18:00 +34-354-5468-8
ceo@ctvz.fund
New YorkNew YorkNew York 40 Wall Street, New York City, USA +1 212 660 2285 Mon - Fri 10:00-18:00 +34-354-5468-8
ceo@ctvz.fund
AMERICA'S PREMIER OPPORTUNITY ZONE FUND
An exiting new investment opportunity
PUBLICLY TRADED
Symbol: CTVZ OTC:PINK
PROFESSIONALLY MANAGED
By State-Registered Investment Adsvisors
HOW TO INVEST

Tax Benefits Explained

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The Opportunity Zones program offers three tax incentives for investing in designated low-income communities through a qualified Opportunity Fund:

Defer Tax Payable

It is very easy to use

A temporary deferral of inclusion in taxable income for capital gains reinvested into an Opportunity Fund. The deferred gain must be recognized on the earlier of the date n which the opportunity zone investment is disposed of or December 31, 2026

Reduce Tax Payable

It is very easy to use

A step-up in basis for capital gains reinvested in an Opportunity Fund. The basis is increased by 10% if the investment in the Opportunity Fund is held by the taxpayer for at least 5 years and by an additional 5% if help for at least 7 years, thereby excluding up to 15% of the original gain from taxation.

Pay Zero Taxes

It is very easy to use

A permanent exclusion from taxable income of capital gains from the sale or exchange of an investment in an Opportunity Fund if the investment is help for at least 10 years. This exclusion on applies to gains accrued after an investment in an Opportunity Fund.

A temporary deferral of inclusion in taxable income for capital gains reinvested into an Opportunity Fund. The deferred gain must be recognized on the earlier of the date n which the opportunity zone investment is disposed of or December 31, 2026

A step-up in basis for capital gains reinvested in an Opportunity Fund. The basis is increased by 10% if the investment in the Opportunity Fund is held by the taxpayer for at least 5 years and by an additional 5% if help for at least 7 years, thereby excluding up to 15% of the original gain from taxation.

A permanent exclusion from taxable income of capital gains from the sale or exchange of an investment in an Opportunity Fund if the investment is help for at least 10 years. This exclusion on applies to gains accrued after an investment in an Opportunity Fund.

The Opportunity Zones program is designed to incentivize patient capital investments in low-income communities nationwide. All of the underlying incentives relate to the tax treatment of capital gains, and all are tied to the longevity of an investor’s stake in a qualified Opportunity Fund, providing the most upside to those who hold their investment for 10 years or more.
The tables below illustrates how an investor’s available after-tax funds compare under different scenarios, assuming various holding periods, annual investment appreciation of 7%, and a long-term capital gains tax rate of 23.8% (federal capital gains tax of 20% and net investment income tax of 3.8%). For example, after 10 years an investor will see an additional $44 for every $100 of capital gains reinvested into an Opportunity Fund in 2018 compared to an equivalent investment in a more traditional stock portfolio generating the same annual appreciation. Table 1 and the examples that follow provide additional information on the tax liabilities and differences in the after-tax annual rates of return.

Example 1

Margaret has $100 of unrealized capital gains in her stock portfolio. She decides in 2018 to reinvest those gains into the CTVZ Opportunity Fund that invests in distressed areas of her home state, and she holds that investment for 10 years. Margaret is able to defer the tax she owes on her original $100 of capital gains until 2026. Further, the basis is increased by 15% (effectively reducing her $100 of taxable capital gains to $85). Thus, she will owe $20 (23.8% of $85) of tax on her original capital gains when the bill finally comes due. In addition, since she holds her CTVZ Opportunity Fund investment for at least 10 years, she owes no capital gains tax on its appreciation. Assuming that her CTVZ Opportunity Fund investment grows 7% annually, the after-tax value of her original $100 investment in 2028 is $176. Margaret has enjoyed a 5.8% effective annual return, compared to the 2.8% an equivalent non- Opportunity Fund investment would have delivered. Total tax bill in 2028: $20

  • After-tax value of investment in 2028: $176
  • Effective after-tax annual return on $100 capital gain in 2018: 5.8%
  • Total tax bill in 2025: $35
  • After-tax value of investment in 2025: $126
  • Effective after-tax annual return on $100 capital gain in 2018: 3.3%

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Example 2

As in Example 1, in 2018 Margaret rolls over $100 of capital gains into the CTVZ Opportunity Fund. She holds the investment for 7 years, selling in 2025. As in Example 1, she temporarily defers the tax she owes on her original capital gains and steps-up her basis by 15 %, so that in 2025 she will owe $20 (23.8% of $85) of tax on her original capital gains. Unlike Example 1, however, Margaret will owe capital gains tax on the appreciation of her CTVZ Opportunity Fund investment, since she holds the investment for less than 10 years. Assuming that her CTVZ Opportunity Fund investment grows 7% annually, in 2025 Margaret will owe $15 (23.8% of $61) of tax on the CTVZ Opportunity Fund investment’s capital gain. Margaret did not take full advantage of the Opportunity Zone program but nevertheless received a 3.3% effective annual return compared to the 1.5% an equivalent non-Opportunity Fund investment would have delivered.
Total tax bill in 2025: $35

After-tax value of investment in 2025: $126
Effective after-tax annual return on $100 capital gain in 2018: 3.3%

Example 3

As in Example 1, in 2018 Lilah rolls over $100 of capital gains into the OZ Opportunity Fund. She holds the investment for 5 years, selling in 2023. As in Example 1, she can temporarily defer the tax she owes on her original capital gains, but her step-up in basis is only 10%, so that in 2023 she will owe $21 (23.8% of $90) of tax on her original capital gains. As in Example 2, Lilah enjoys no exemption from capital gains tax on the appreciation of her OZ Opportunity Fund investment, since she holds the investment for less than 10 years. Assuming that her OZ Opportunity Fund investment grows 7% annually, in 2023 Lilah will owe $10 (23.8% of $40) of tax on the OZ Opportunity Fund investment’s capital gain. Lilah did not take full advantage of the Opportunity Zone program but nevertheless received a 1.8% effective annual return on her initial capital gains compared to the -0.1% effective annual return an equivalent non-OZ Opportunity Fund investment would have delivered.

Total tax bill in 2023: $31

  • After-tax value of investment in 2023: $109
  • Effective after-tax annual return on $100 capital gain in 2018: 1.8

Information provided by Economic Innovation Group, a bipartisan public policy organization, combining innovative research and data-driven advocacy to address America’s most pressing economic challenges

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Deadline for 2019 Opportunity Fund Contributions
A courtesy reminder that under existing IRS regulations, the deadline for reinvesting capital gains in an Opportunity Fund to qualify for capital gains tax deferral, possible reduction and other potential tax benefits is 180 days from the date of the sale or exchange.Call one of our registered Investment Advisors for a free consultation.today!
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