How to Defer Capital Gains Tax with a QOZB Investment in Solar Manufacturing

• You recently sold your business

• You sold your founder's shares in a startup

• You were part of a private equity exit

• You missed out on a 1031 exchange after selling a real estate property

If so, you can benefit from tax-advantaged Qualified Opportunity Zones (QOZs) added to the tax code in late 2017.

As you may know, the 2024 long-term capital gains tax rate is 20% for heads of household with taxable income over $551,350 and 15% for heads of household with taxable income between $63,000 and $551,350.

Also, a 3.8% Medicare surtax, a.k.a. Net Investment Income Tax (NIIT), is charged to those with investment income and modified adjusted gross income over $250,000 for joint filers, $125,000 for married filing separately, and $200,000 for all other filers.

QOZs and Tax Advantages

According to the IRS, "A QOZ is an economically distressed community where new investments, under certain conditions, may be eligible for preferential tax treatment."

The 2017 tax code change spurred the creation and growth of QOZ investment funds.

Since 2018, real estate-focused QOFs (Qualified Opportunity Funds) have been the most popular QOZ investments for those with significant capital gains tax exposure. These funds have ranged in scope from multifamily housing to hotels to commercial buildings.

An emerging alternative exists with a higher potential return than real estate.

A QOZB (Qualified Opportunity Zone Business) investment is a lesser-known alternative for capital gains deferral. A QOZB is a business operating in a Qualified Opportunity Zone.

One such example of an alternative market for QOZ investing is the solar power generation business sector, which is experiencing explosive growth.

While the IRS QOZ tax code did not create this industry, another IRS tax code change, the Inflation Reduction Act of 2022, offers significant Federal tax credits and cash toward its growth over the next eight years.

Accredica's Role

For years, SDC has focused its investment efforts on solar-related projects, including nonprofit solar array installations and utility-scale solar projects.

Accredica has an investor opportunity for a tax-advantaged Opportunity Zone business with Inflation Reduction Act cash benefits as part of this solar industry focus.

That business is a domestic solar panel manufacturing plant located in a QOZ in College Station, Texas.

The combination of profit from business operations and the Inflation Reduction Act incentives virtually guarantees the return of capital before the QOZB-deferred capital gains tax is due.

If you want to learn how to defer capital gains tax until 2026 and pay the tax through highly profitable, tax-free business cash flow, please schedule an online meeting with me or visit our investor portal.