Opportunity Zones

Perhaps, one of the greatest opportunities for real estate investors of all types to come along in quite some time and something we are going to be hearing about quite a bit in the near future.

What is an Opportunity Zone?

Created by the Tax Cuts and Jobs Act in 2017, an Opportunity Zone, is an economicallydistressed community where new investments, under certain conditions, may be eligible for preferential tax treatment. Localities qualify as Opportunity Zones if they have been nominated for that designation by the state and that nomination has been certified by the Secretary of the U.S. Treasury via his delegation of authority to the Internal Revenue Service.

They are an economic development tool— designed to spur economic development by providing tax benefits to investors.

• First, investors can defer tax on any capital gains from the sale of an asset by investing those gains into a Qualified Opportunity Fund (these are funds created to invest in Qualified Opportunity Zones)

• Second, if the investor holds the investment in the Opportunity Fund for at least ten years, the investor is eligible for an increase in basis of the QOF investment equal to its fair market value on the date that the QOF investment is sold or exchanged.

What is a Qualified Opportunity Fund?

A qualified opportunity fund is any investment vehicle organized as a partnership or corporation for the purpose of investing in one or more qualified opportunity zones. An opportunity zone fund must hold at least 90 percent of its assets in qualified opportunity zone property.

Learn More: We have a resource with links for our readers online at www.marei.org/ opportunityzones/