Opportunity zone fund ideas?

[Lane Kawaoka]

I did some research on this new Opportunity Fund Zone tax benefits. Below are some notes and ideas. Note I'm not a CPA or attorney just putting it out there to help inspire some ideas. An Opportunity zone (OZ) is tax-favored investment for people with capital gains. 6-pages in the tax document in the new 2017 Tax Cuts and Jobs Act Goal to encourage long term investments in low-income communities across the US. Every major city has some OZ. Most of Detroit is an OZ plus large portions of Baltimore. Allows investors to sell their appreciated assets and invest thier realized capital gains into one of more designated OZ. EVEN STOCKS! Non-like kind assets is OK! After your selling your appreciated asset you have 180-days. The longer you hold the more benefit you get (up to 10 years). 1) Defer your original capital gain tax obligations until 2026 or untill you sell your OZ investment. 2) Discount of 10% or 15% on the taxable amount of your original gains. If you hold more than 5 years your original cap gains decreases 10% 3) If you hold 10 years or more. You will pay NO capital gains tax on any appreciation. You can self certify so you do not need an intermediary like in 1031 exchanges. No investment minimum. There are some items that get a little unclear... where you should really consult your CPA. Check out the IRS opportunity comes frequently asked questions page and additional resources below. Resources to Google: community development financial institutions fund, CDFI Fund map. Note: Spending $100 dollars to save $20 dollars is not a wise idea. Just like buying a rental next to Grandma's house because your travel there. A lot of specifics are still being played out but something intriguing to augment an already good investment. Other ideas: Look at the OZ map and try to find the smaller slivers of OZ. This is called "buying on the line" where as areas improve on the edge of development you greatly benifit.

[Trevor Ewen]

@Lane Kawaoka

One thing I recommend people take a look at is the number of smaller towns that are Opportunity Zones. Detroit and Baltimore sometimes feel like the White Whales of residential real estate. Detroit and Baltimore people don't get mad at me. I know you can do it, but out-of-staters rarely know what's in store in those places.

My parents live right next to a small town in Virginia called Buena Vista. 7000 people in the 2010 census. It's an OZ town. The problems there are mostly just local business depression and general malaise. 

There is a growing university there and certainly opportunities for residential development that keep you out of D-Class and potentially dangerous situations. Because the scale is smaller too, it's much easier to meet the right people and manage whatever political willpower it takes to move forward. 

Just a few thoughts. I would definitely scan the list for some of the smaller, quieter communities in your vicinity.