Opportunity Zone Investing

[Mandy Cohen]

I am very interested in the new Opportunity Zone introduced to us by Amanda Han, CPA a while back. There's quite a bit of talk online, but not exactly on how to set up the Opportunity Fund and to get it going. There is an Opportunity Zone area in my "backyard", in which I am interested in investing. None of the local CPAs that I have reached out to seem to know much about it. Is anyone currently involved in an Opportunity Fund and can you share your experience?

[Rodolfo Canon]

The Opportunity Zone Program must go through the formal rule-making process before the program can be finalized and investments can be made. Treasury must first propose a structure for implementing the new rule, after which the agency will issue a notice of proposed rule-making and will request public comments on the proposal. The comment period typically lasts from 30 to 60 days. Upon reviewing the comments and making any necessary changes to the rule, Treasury will issue a final rule that formally sets up the Opportunity Zone Program.

An individual will be able to set up his or her OZONE. Buying now in the OZONE should not create problems since the benefit comes with the deferral of capital gains. However, you will have to know the mechanics of setting up your fund. There are three "eligible purposes:" stock, partnership interest, and business property. I imagine that if you own an income-producing property and create your fund with that property as the asset, that it would qualify. But as Paolo has said, talk to your accountant first. 

In the Denver, Colorado market these OZONES are in some very interesting areas that are very close (within one mile) to some very vibrant areas.