Tax Benefits From Opportunity Zones

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I feel that when people choose where they invest their money they look for the highest return with the most security and tax advantages. New types of investments that are created can have high benefits but can offer risks. One of these new types of investments is called an opportunity zone. This area of investment is new but offers many benefits, so let us discuss what is an opportunity zone?

An opportunity zone as defined by the IRS is “an economically-distressed community where new investments, under certain conditions, may be eligible forpreferential tax treatment.”

  • The designation was created with the passing of the Tax Cuts and Jobs Act by congress in 2017.
  • It was created in order to encourage development and new construction in low income communities.
  • Qualified areas were determined in 2018 through a process where state governors nominated up to 25% of eligible census tracts in their state that met the IRS’ definition of a low income area.
  • A business can be designated as an opportunity zone business if substantially all of the property owned or leased is opportunity zone property, as well as meeting other requirements.

“With the successful closing of our Royalty II program, we have opened the third program as a Qualified Opportunity Zone Fund. VivaVentures Opportunity Fund, a Utah LLC, will fund the manufacturing of our third RPC. We are very excited to share these substantial investment opportunities, created by President Trump’s 2017 Tax Cuts and Jobs Act with investors. As investors take advantage of our Opportunity Zone Fund we anticipate they will experience substantial tax savings through our Opportunity Zones. The third RPC is expected to be deployed as soon as 90 days post-closing of this financing. ” stated Vivakor Chief Executive Officer Matt Nicosia.

Since we now understand what an opportunity zone is, you should ask what are the benefits of investing in an opportunity zone? Opportunity zones offer many tax benefits in the immediate short term as well as holding for a longer term. 

  • Investors are able to reallocate gains from other investments into a qualified opportunity zone for substantial tax breaks.
  • Capital gains can be temporarily deferred if you invest within 180 days of the date of sale.
  • Holding the investment for 5 years will reduce the gains tax by 10% and after 7 years an additional 5% resulting in a total tax reduction of 15%.
  • If the investment is held for 10 years, any growth of the initial capital will be relieved of the capital gains tax.
  • Capital gains tax does not need to be paid until the investment is removed from the opportunity fund.

These are some very substantial benefits, especially if you have recently sold out of an investment, (sale of business, stock, real estate, etc.) and are looking to defer capital gains. So, let us discuss how do I invest in an opportunity zone?

  • You have 180 days from the sale of an investment to invest in a qualified opportunity fund.
  • The investment needs to be a recognized gain and elect to defer tax on that gain.
  • Eligible investors are individuals, C and S corporations, partnerships, trusts and estates.
  • There are many qualified opportunity zone businesses but one example is the VivaVentures Energy Group owned by Vivakor that is part of the VivaVentures opportunity zone fund, has a proprietary oil remediation/extraction technology and is based in an opportunity zone near Salt Lake City, Utah.
  • This opportunity offers additional benefits on top of the opportunity zone benefits because you get the oil and gas benefits as well as royalties which allow you to create wealth.
  • Royalties provide a long term passive income with no exploration risk since the oil being extracted is from tar sands on the surface.
  • A K1 tax deduction is issued for oil and gas investments in the first year of investment for up to 80% of the amount invested. It can be used each year until the amount is used up.

After explaining what an opportunity zone is and understanding the benefits of investing, you should have a better understanding of how this opportunity will benefit you. The primary purpose of this article is to help you understand this new type of investment that is only available for a limited time.  If you are someone who is curious or have any questions about investing in a qualified opportunity zone, please reach out to us at or (949)401-6897 and one of our representatives will contact you or visit our website at

Vivakor & Retirement

Investors are now looking towards safe and secure investments to grow their retirement accounts and create a sustainable future. By seeking investments that provide protection against a volatile stock market and potentially provide passive income, investors may create a better style of life for their retirement.

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