Case study
Case Study: Accessing Long-Term Gains With Opportunity Zone Funds
Discover how Breakwater Exchange helped a client preserve wealth, defer tax, and generate passive income in this case study. Learn how our approach creates long-term results.
Leveraging New Oppurtunites With Tax Burdens: An Example
After selling their family-run construction business of over two decades, Breakwater Exchange’s clients found themselves at a financial crossroads. With a $3 million capital gain looming, their primary concern was how to avoid a substantial tax hit while still making smart, long-term investments. The couple had worked hard to build their business and wanted to protect their legacy while shifting from active management to passive income. Our team stepped in to explore sophisticated deferral strategies that could help them reinvest intelligently and preserve more of what they had earned.
Turning Capital Gains into Tax-Deferred Growth
By allocating $1 million of their proceeds across three well-vetted Opportunity Zone funds, Breakwater Exchange’s clients were able to defer capital gains tax and earn passive income. These investments were tied to tangible development projects in high-growth communities, offering long-term upside and built-in social impact.
Outcome
The Outcome: Income Now, Eliminating Capital Gains Later
Roughly two and a half years after funding the QOFs, the underlying real estate developments were complete, leased, and fully stabilized. The client now receives annual distributions averaging 7%, a reliable income stream with none of the management burden they’d carried for decades. What’s more, by holding these funds for at least 10 years, they’ll eliminate capital gains from the business sale and QOF asset appreciation. Breakwater Exchange’s strategy and process provided peace of mind, real financial performance, and a legacy-level wealth plan.
Build an Efficient Tax Strategy With Breakwater Exchange
Breakwater Exchange can help you design a personalized Opportunity Zone plan. Reach out today and let’s craft a wealth strategy that works for both your portfolio and your tax future.
FAQs About Our Opportunity Zone Fund Strategies
What types of gains can I defer using a Qualified Opportunity Fund?
Breakwater Exchange can help you defer capital gains from real estate, business sales, and other appreciated assets. We structure it to meet all IRS requirements .
How long do I have to hold the investment to eliminate gains?
Breakwater Exchange’s Opportunity Zone solutions are designed with a 10+ year hold strategy in mind. After this period, capital gains from the fund can be eliminated entirely.
Can I receive income from the Opportunity Zone investment?
Yes. Many of Breakwater Exchange’s QOF projects begin generating income within 24–36 months after stabilization. Our team and our esteemed sponsors vet every fund for potential yield and growth.
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