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


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)


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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Another incidence of SWAT Team training tactics for our misguided "Civilian Warriors". This time in Phoenix and three years later...

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