The U.S. tax code is larded with provisions that the wealthy use to reduce their taxes. Some get a lot of attention, while some are inserted into tax bills very quietly—like Opportunity Zones, or OZs.
Six pages tucked into the sprawling 2017 Tax Cuts and Jobs Act led to the creation of 8,764 of these tax havens across the U.S., ostensibly to lure private capital to poor neighborhoods. Anyone can invest capital gains from a previous investment in a building or business in a census tract designated as an OZ by a state’s governor, defer and reduce taxes on that initial gain, and then pay zero capital-gains tax on any profits from that OZ investment, provided that they stick with it for 10 years. Other than holding on to an appreciated asset until you bequeath it to your children, there aren’t many other ways to avoid capital-gains taxes altogether. This one has a huge advantage: “You don’t have to die,” says Brad Cohen, a Los Angeles tax lawyer.
