Opportunity Zone Question

4 Replies

I saw a property come up for sale in an opportunity zone that I would consider living in.  

It has an apartment that is rented out in the back and an attic that is plumbed for an apartment addition, so there is an income producing aspect to it even if I purchased it as a primary residence.

My question is can I purchase the property with a partnership LLC (which already exists and owns property) and then rent the main house from the LLC for myself to live in?

To raise purchase funds, I'd like to either sell a property that is already owned by the LLC (1031 exchange) or stock to reinvest the capital gains to take advantage of the O Zone.

@Nathan McBride

There are many components when creating a qualified opportunity fund and investing in a qualified opportunity zone.

1) You want to make sure you create a proper entity and self-certify it is a QOF
2) You want to make sure the funds contributed into a QOF qualify
3) You want to make sure you make a timely contribution into a QOF
4) You want to make sure the property purchased is within a QOZ
5) You want to make sure you do a proper amount of rehabilitation to the property and in a timely fashion
6) You want to make sure you hold the investment property for atleast a specific amount of time

Something you and your accountant can gameplan.

@Basit Siddiqi

Thanks for the input.  After discussing with a local CPA, it looks like I am getting overcomplicated in my attempt to be creative.


For the sake of simplicity, and assuming the numbers work, it may make the most sense to just sell my primary residence and purchase this one with a 30-yr note and just take the capital gains hit on the sale of our house (we've been in it for less than 2 years).

Originally posted by @Nathan McBride :

@Basit Siddiqi

Thanks for the input.  After discussing with a local CPA, it looks like I am getting overcomplicated in my attempt to be creative.


For the sake of simplicity, and assuming the numbers work, it may make the most sense to just sell my primary residence and purchase this one with a 30-yr note and just take the capital gains hit on the sale of our house (we've been in it for less than 2 years).

 Is there a reason you are moving?
There may be a pro-rated exclusion depending on the reason for the move.