Both defer tax, but they fit different gains and different investors. A side-by-side.
A 1031 exchange defers tax on the sale of investment real estate by reinvesting all proceeds into like-kind property. An Opportunity Zone fund defers tax on a capital gain from any source by reinvesting just the gain — and can make a decade of appreciation tax-free.
The 1031 path keeps you in real property with ongoing deferral and an estate step-up. The OZ path opens to stock and business gains and rewards a 10-year hold, but typically means development risk and a longer lock-up.
For many investors the answer isn't either/or. The right structure depends on the source of the gain, the time horizon, and the role the investment plays in the portfolio.
This article is for general educational purposes only and is not investment, tax, or legal advice, or an offer to sell or solicitation to buy any security. DST, Opportunity Zone, and other private placements are speculative, illiquid, and sold only to accredited investors via private placement memorandum. Consult your own CPA and attorney.
