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April 22, 2020

How Opportunity Zones Can Give Shelter to CRE Investors During the Coronavirus
By Les Shaver

Blake E. Christian, partner at Holthouse Carlin & Van Trigt LLP, has been a practicing CPA for 39 years. In that time, he hasn't seen a tax provision program as flexible and powerful as Opportunity Zones.
“It's like a Roth IRA and a 1031 [exchange] combined, but way more flexible,” Christian says.

But with Opportunity Zones, like everything else, people are wondering how COVID-19 will change its business case. At first, Christian was worried that the pandemic would ruin the program as developers stopped doing projects.

But lately, he's reconsidered his initial concerns. The sell-off in the stock has given investors gains that they need to reinvest. Opportunity Zones are a logical target for them.

“As I look at this, you've got devaluing assets,” Christian says. “You've got a 10-year investment horizon [with Opportunity Zones]. I think the average investor out there is switching to a longer-term horizon just naturally.

Right now, Christian thinks many investors are “frozen.” “They don't know what they want to do,” he says. “So, they may want to sit tight for a while.”

Christian says the Opportunity Zone program is perfect for such investors as they can put money into a subsidiary and wait. “If you put two investments into a Qualified Opportunity Zone fund, then you get 62 months to just sit on your hands and decide what you're going to do,” he says.

In the process of deciding what they're going to do with their money, investors can use Opportunity Zones to defer their tax hit. Read more

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