---
title: 2023 Capital Gains? It’s Not Too Late for Deferral with Qualified Opportunity Zones!
description: It is not too late to defer last year's capital gains with Qualified Opportunity Zones.
image: https://www2.1031dst.com/hubfs/AdobeStock_269940861.jpeg
---
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# Fortitude's Insights
[1031 Exchange](https://www2.1031dst.com/insights/topic/1031-exchange) [Opportunity Zones](https://www2.1031dst.com/insights/topic/opportunity-zones)
# [2023 Capital Gains? It’s Not Too Late for Deferral with Qualified Opportunity Zones!](https://www2.1031dst.com/insights/capital-gains-deferral-with-opportunity-zones)
By [Justin Kiehne](https://www2.1031dst.com/insights/author/justin-kiehne) | 13, May 2024
[READ NOW](https://www2.1031dst.com/insights/capital-gains-deferral-with-opportunity-zones)
[](https://www2.1031dst.com/insights/author/justin-kiehne)
[Justin Kiehne](https://www2.1031dst.com/insights/author/justin-kiehne)
Tags: [1031 Exchange](https://www2.1031dst.com/insights/topic/1031-exchange) [Opportunity Zones](https://www2.1031dst.com/insights/topic/opportunity-zones)
When it comes to tax deferral strategies for realized capital gains, we believe the IRC Section 1031 Exchange is considered the gold standard. Tax deferred exchanges have been utilized by the savvy investor as far back as the 1920’s, following a 1921 amendment to the federal tax code. Over the course of more than a century of evolution and permutation, the tax deferred exchange allowed investors to sell real estate, machinery, vehicles, equipment, artwork, collectibles, livestock, patents, and other intellectual property without fear of incurring a hefty tax bill.
With the passage of the [Tax Cuts and Jobs Act (TCJA)](https://www2.1031dst.com/opportunity-zones), the newest iteration of the tax-deferred exchange took shape in 2017. The 1031 Exchange is now limited solely to the exchange of “real” property (ask your CPA). For most, that effectively limits the 1031 exchange to real estate.
However, as we’ve [discussed previously](https://www2.1031dst.com/insights/how-to-utilize-qualified-opportunity-zone-investments-with-your-clients), the TCJA also introduced the [Qualified Opportunity Zone](https://www2.1031dst.com/insights/daniel-raupp/everybody-loves-talking-about-opportunity-zones), a boon for the tax-averse that were impacted by the new limitations imposed upon the 1031 exchange. Check out the helpful chart at the end of this article to see the differences between 1031 Exchange and Qualified Opportunity Zone investment strategies and give us a call if you’d like to talk tax-deferral!
### **It’s Not Too Late to Defer 2023 Capital Gains by Investing Before September 10, 2024 **
Investors familiar with QOZ rules may know that there is a [180-day window](https://www2.1031dst.com/insights/daniel-raupp/the-opportunity-with-opportunity-zones) during which an individual must reinvest their gains to be eligible for the aforementioned tax benefits. Similar to the 1031 exchange, the clock starts on the day when an asset is sold, and the capital gain is realized.
However, the rules become slightly more complicated (and potentially more advantageous) for pass-through entities. This includes partners in a partnership, members of a limited liability company, shareholders of an S-Corporation, and beneficiaries of a trust, among others.
In these scenarios, individuals may take advantage of additional time before investing in a QOZF, while still receiving the tax benefits. For these entities, the 180-day clock may start on one of three dates:
1. The date that the pass-through entity sold the asset that gave rise to the capital gain
1. Eg., asset sold January 1, 2023, gain generated January 1, 2023
2. 180 days from January 1, 2023 implies reinvestment deadline of June 30, 2023
2. The last day of the pass-through entity’s taxable year
1. Eg., asset sold January 1, 2023 & therefore gain generated January 1, 2023, but the last day of the entity’s taxable year is December 31, 2023
2. 180 days from December 31, 2023 implies reinvestment deadline of June 28, 2024
3. The due date of the pass-through entity’s tax return, without extensions (i.e. March 15 for pass-through vehicles with calendar year-ends)
1. Eg., asset sold January 1, 2023 & therefore gain generated January 1, 2023, but the due date of the entity’s tax return is March 15, 2024
2. 180 days from March 15, 2024 implies reinvestment deadline of September 10, 2024
This means that capital gains and/or taxable depreciation recapture generated **AS FAR BACK AS JANUARY OF 2023** may still be eligible for deferral until September 10, 2024.
Check out the helpful chart below for the difference between [1031 Exchange and Qualified Opportunity Zone tax benefits](https://www2.1031dst.com/insights/investor-profile-1031-exchange-opportunity-zone). Don’t hesitate to reach out to our team at Fortitude Investment Group to discuss your situation and the options that might be available to you.
### **1031 Exchange vs. Qualified Opportunity Zone**
****
[](https://cta-redirect.hubspot.com/cta/redirect/4583849/c42c6894-2ac4-444e-9b74-bc1c064130a7)
Important DisclosuresCertain Qualified Opportunity Zone (QOZ) areas may not be able to appreciate as predictably as more established areas. Some neighborhoods may be more accommodating to development than others, impacting the success of the investment. Development and redevelopment of real estate traditionally have more risk than other types of real estate strategies. The availability and cost of construction and development financing is uncertain and represents a risk inherent in the execution of a QOF strategy. The rules and regulations of the QOZ Program are complex, compliance with the QOZ Program comes with significant challenges. QOFs tend to be illiquid investments for ten or more years. Any discussion regarding “Qualified Opportunity Zones” — including the viability of recycling proceeds from a sale or buyout — is based on advice received regarding the interpretation of provisions of the Tax Cut and Jobs Act of 2017 (the “Jobs Act”) and relevant guidance’s, including, among other things, two sets of proposed regulations and the final regulations issued by the IRS and Treasury Department in December of 2019. A number of unanswered questions still exist, and various uncertainties remain as to the interpretation of the Jobs Act and the rules related to Opportunity Zones investments. We cannot predict what impact, if any.
bd-ld-gp-a-487-5-2024
# [Justin Kiehne](https://www2.1031dst.com/insights/author/justin-kiehne)
Justin R. Kiehne is a Financial Advisor with Fortitude Investment Group, located in Juno Beach, Florida, where Mr. Kiehne resides. Justin’s professional career began in the Aerospace Engineering industry, working in gas turbine engine design and analysis, managing technical teams and customer relationships. With his nontraditional background, Justin brings a unique, analytical perspective and a passion for customer service to bear in which he seeks to meet and exceed customer expectations. At Fortitude, Justin focuses on real estate and tax advantaged investments, retirement, and estate planning. He prides himself on delivering high quality, institutional grade real estate solutions, alternative investment options, and comprehensive, individually tailored portfolios to the retail investor that seeks to diversify investments, help remove market volatility, and maximize income potential. Mr. Kiehne was raised in Annapolis, Maryland and is an avid Navy Football fan. He holds a Master of Science Degree in Mechanical Engineering from the University of Florida and a Bachelor of Science degree with a Dual Major in Physics and Biology from Dickinson College. A former award-winning lacrosse and track athlete, Justin maintains an interest in weightlifting, golf, lacrosse, and fishing. Justin maintains his series 7 General Securities License.
This is for informational purposes only and is not an offer to buy/sell an investment. There are risks associated with investing in Delaware Statutory Trust (DST) and real estate investment properties including, but not limited to, loss of entire principal, declining market value, tenant vacancies and illiquidity. Diversification does not guarantee profits or guarantee protection against losses. Potential cash flows/returns/appreciation are not guaranteed and could be lower than anticipated. Because investors situations and objectives vary this information is not intended to indicate suitability for any particular investor. This information is not meant to be interpreted as tax or legal advice. Please speak with your legal and tax advisors for guidance regarding your particular situation.
Securities offered through Concorde Investment Services, LLC (CIS), member FINRA/SIPC. Advisory services offered through Concorde Asset Management, LLC (CAM), an SEC registered investment adviser. Insurance products offered through Concorde Insurance Agency, Inc. (CIA) Fortitude Investment Group is independent of CIS, CAM, and CIA.
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