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November 21, 2019

Tax-Free Windfalls: A Definitive Look At Opportunity Zones


BY Salvatore Buscemi

The Opportunity Zone (OZ) program is a relatively new federal tax incentive introduced by The Tax Cuts and Jobs Act in 2017. The policy behind the opportunity zone incentive is to encourage investors with capital gains to invest in low-income and undercapitalized communities — economically distressed areas that don't get a lot of investment attention — in an attempt to promote all-around rapid development of these communities (or tracts, as they are officially called).

Whether you are coming across opportunity zones for the first time or you have heard investors, asset operators and government firms talking about them, you want to pay attention to how you as an investor, or how your community or zone, can benefit from it.

My firm is currently working on a 5,000-acre industrial real estate opportunity zone development located in Reno that will be phased in over the next few years. It's a $30-million equity investment. It not only has valuable railways going through it, but it is also located on two major interstate highways. The acreage is 90% flat, perfect for developing coveted data centers.

That's the good news. The bad news is that not all investors will be able to participate. Only those who have capital gains that they can realize can opt to invest proceeds into opportunity zones such as these. Read more.

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