You have a client who recognized a $3,364,110 gain in June 2023. This came from the sale of a building for $4,843,000. The building had a tax basis of $1,478,890. The client received a check for $4,843,000 at closing of the building sale. The client has heard that it may be possible to defer the gain by investing in an opportunity zone.

This client has identified a fund that is reported to be a qualified opportunity fund (QOF). The sponsor of this fund is accepting investments.

The client has two questions:

1. How much of the $4,843,000 must he invest to avoid reporting any gain from the building sale? 

2. What if he does not invest the full sales price? Is it still possible to avoid reporting some gain? 

3. What happens to any gain that is not reported in 2023? 

4. Are there any other advantages of investing in a QOF?

 

Answer rating: 100% (QA)

Answer Here are the answers to your clients questions 1To avoid reporting any gain from the building ... View the full answer