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Can I transfer ownership of my OZ investment to a relative?

I’m interested in gifting my OZ investment to my grandchild. Is that possible? What are the tax implications?

  • Guy Nicio
    July 31, 2019

    That would be considered a gift, which is considered an inclusion event, meaning the deferred gain would become due upon the gift. It would not be an inclusion invent, however, if the grandchild received a distribution from your estate post mortem.

  • Brad Cohen
    July 18, 2019

    You can do it at death. No negative income implications subject to generation-skipping tax implications

  • Maria De Los Angeles Rivera
    July 17, 2019

    The second set of regulations provide a list of triggering events. Usually a change in ownership will trigger recognition of the deferred gain. A gift will constitute a change in ownership and with the exception of gift to a grantor trust, will trigger taxation.

  • Jonathan McGuire
    July 16, 2019

    The general rule is a gifted interest would be an inclusion event negating the QOZ benefits. However, doing so using a grantor trust is a possible work around. If you are not worried about the estate tax, it is possible to retain the investment and pass it to your heirs retaining the tax benefits. This is an area that still needs further guidance and it would be best to proceed with caution. Engaging both an estate and gift attorney as well as a tax professional (CPA or tax attorney) on QOZs would be advisable to work through the details.

  • Matthew Rappaport
    July 16, 2019

    You can transfer your OZ investment to a relative, but when you do, the deferred capital gain comes due.

  • Pat Cardwell
    July 16, 2019

    Yes, in most cases. The tax benefit goes with the estate.