31 December 2018

Another Way to Understand Opportunity Zones

This post today is a somewhat delayed follow-up to an invitation to attend a meeting here in Mesa earlier in this year Please see > SEARCHBOX on this blog site 
It's from an email Update received in my inbox from Walter Unger, CCIM and Commercial Broker with Kasten Long Commercial Group
Walter Unger: Arizona Opportunity Zones As We Understand Them .\

PLEASE NOTE: Disclaimer: This post is by no means intended as an endorsement of any kind - it's information with some maps. No other purpose is implied.
Arizona Opportunity Zones As We Understand Them
Here's the Nitty-Gritty from Walter Unger:
Opportunity Zones As We Understand
  • If the capital gain from the sale of an asset (real estate or other) is invested in an “Opportunity Zone Fund (O-Fund), the gain can be deferred to December 31, 2026 with a 15% decrease in the taxable gain amount.
  • If the O-Fund is held for 10 years and sold, there would be no capital gains tax on the O-Fund’s appreciation.
  • If you are an investor, the ability to defer a capital gain to 2026 might be very attractive PLUS, having no capital gains tax on the O-Funds appreciation could be huge!
Certain Tax Incentive Programs
  • New Markets Tax Credits (subsidy program for commercial projects and businesses): MNTC Kept
  • Investment Tax Credit (Solar): Kept
–Bonus depreciation
  • Historic Tax Credits (subsidy for rehabilitation of older buildings):
–No 10% credit
–20% tax credit is kept but is now taken over 5 years instead of in the year of placed in service.
  • Investment in Opportunity Act
New program – Opportunity Zones (O-Zones)
History – Investment in Opportunity Act
  • Drafted in 2016/Introduced February 2017
  • Bipartisan Legislation
– Rep. Tiberi (R)
– Rep. Kind (D)
– Sen. Scott (R)
– Sen. Booker (D)
  • Goal to encourage private capital investment in economically distressed areas.
Opportunity Zone Program
  • Opportunity Zone Program – The Investment in Opportunity Act was included in the Tax Cuts and Jobs Act 2017
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CLICK HERE TO SEE IT ALL: 

Opportunity Zone Tax Cuts and Jobs Act Program by Marc Schultz

                                    
What is an Opportunity Zone (O-Zone)
  • Population census tract that is a low-income community (LIC)
– Approximately 75,000 total census tracts in the U.S.
– 37% of the census tracts in the United States are LICs
  • What is a LIC
– Same definition for NMTCs
  • Based upon poverty rate (20%) or median family income (80%)
  • Timely nominated by each Governor
  • 25% of the LICs were eligible for nomination
– Approximately 8,700 census tracts
– 5% of the tracts to be nominated can be contiguous tracts (Note: Mesa has 2)

MAPS


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Click HERE TO SEE IT ALL: 
FROM Walter Unger:                                                                       
"Phoenix Commercial Real Estate and Investment Real Estate: Investors and Owner / Users need to really know the market today before making a move in owner user Commercial Properties, Investment Properties and land in Phoenix / Maricopa County, Pinal County / Arizona, as the market has a lot of moving parts today. What is going on socio-economically, what is going on demographically, what is going on with location, with competing businesses, with public policy in general — all of these things affect the quality of selling or purchasing your Commercial Properties, Commercial Investment Properties and Commercial and large tracts of Residential Land  Therefore, you need a broker, a CCIM (Certified Commercial Investment Member) who is a recognized expert in the commercial and investment real estate industry and who understands Commercial Properties and Investment Properties."

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