Before considering an investment in a Qualified Opportunity Zone(QQZ) for clients, advisors should carefully evaluate the suitability of such an allocation, the chief perquisite being: Does the client have, or are they like to insure, substantial exposure to U.S. capital gains, tax obligations arising from the sale of securities, real estate, businesses, art or cryptocurrency? And, are they prepared to allocate the proceeds from these capital gains into an investment strategy that may suggest a holding period of seven to 10 years in order to receive beneficial tax treatment?
If so, the Opportunity Zone program may provide an attractive solution for investors who have accumulated significant unrealized capital gains during the recent bull markets in the U.S. equities and real estate and who desire to mitigate their tax exposure.
About The Author
Al Puchala is one of GRI’s Distinguished Corporate Fellows (DCF) and throughout his 35-year finance career, Al has been an advocate and practitioner for positive social impact investing at scale. As CEO of CapZone, Al combines his expertise and experience to develop a new asset class, Opportunity Zones, to convert profits to purpose nationally. Previously, as an investment banker, private equity investor, strategic financial advisor and creator of market based government related partnership initiatives, he has invested and advised domestic and international parties on complex strategic financial assignments, including corporate mergers, acquisitions and restructurings; loan portfolio monitoring, infrastructure finance, securitization and credit portfolio risk management.
Recently, Al served as CEO of Capitol Peak Asset Management, and prior to that, Managing Director for Moelis & Company in New York, overseeing Public Sector initiatives. He was Co-Founder and Managing Director of Signal Equity Partners, and spent his early career at Lazard Freres and Morgan Stanley. Al holds a BA cum laude from Yale University, a JD From Georgetown University, an MA in Economics from New York University and is a member of the New York Bar.