Compare a traditional taxable investment against a Qualified Opportunity Zone scenario using simplified assumptions. This is an educational illustration only.
These metrics summarize the modeled difference between the two paths. The detailed breakdown is below.
| Category | Non QOZ | QOZ |
|---|---|---|
| Year 0 | ||
| Original Gain | $1,000,000 | $1,000,000 |
| Immediate Tax Paid | $238,000 | $0 |
| Capital Invested | $762,000 | $1,000,000 |
| Year 5 | ||
| Value Before Tax | $1,600,460 | $2,100,342 |
| Basis Step Up | N A | 10% |
| Tax Paid on Deferred Gain | N A | $214,200 |
| Value After Tax | $1,600,460 | $1,886,142 |
| Year 10 | ||
| Total Value | $3,361,514 | $3,961,542 |
| Cost Basis | $762,000 | $3,961,542 |
| Capital Gain at Exit | $2,599,514 | $0 |
| Tax on Capital Gain | $618,684 | $0 |
| Depreciation Recapture Assumption | $31,737 | $0 |
| After Tax Value | $2,711,092 | $3,961,542 |
| Equity Multiple | 2.7x | 4.0x |
Illustration only. This calculator is a simplified educational model and is not investment advice, tax advice, legal advice, or a recommendation to buy or sell any security. Consult your own advisors.
Tax timing note. Under current federal rules, deferred eligible gain is generally recognized on the earlier of a taxable disposition or December 31, 2026. This model shows a mid period payment for illustration only.
Scope note. This model focuses on federal long term capital gains and NIIT assumptions only. It excludes state and local taxes, AMT, fees, leverage, financing terms, distributions, and fund level structure details.
Eligibility note. Any step up or exclusion depends on meeting statutory requirements and timelines. Some step up benefits may not be available for new investments today. The 10 year benefit applies only if requirements are satisfied.
Depreciation note. Depreciation and recapture outcomes depend on asset type, elections, allocations, and investor profile. The recapture shown is a simplified assumption for illustration.
These answers are intended to help investors understand how the framework works and where further discussion may be helpful.
A QOZ investment is typically made through a Qualified Opportunity Fund into qualifying Opportunity Zone property. The program may provide tax benefits when eligibility and holding requirements are satisfied.
Under current federal rules, deferred eligible gain is generally recognized on the earlier of a taxable disposition or December 31, 2026. Your actual timing can vary based on facts and structure.
The model illustrates a potential federal exclusion of post investment appreciation after a 10 year hold if requirements are met. This is not a guarantee and real outcomes vary based on eligibility, structure, and law changes.
No. The calculator focuses on simplified federal capital gains and NIIT assumptions only. It excludes state and local taxes, fees, expenses, leverage, financing terms, and distributions.
Use the results as directional context to understand sensitivity to taxes and growth assumptions. Confirm eligibility, timelines, and tax impacts with your own advisors before making decisions.