Rental Property Investor · Edina, MN · Member since 2018 · 3 posts · 5 votes
Anyone heard about opportunity zones? We are setting up an opportunity fund and will Work on creating a vehicle to help investors defer gains while investing into a fund that will develop properties in MN. This is exciting legislature which will will impact depressed areas of MN and create jobs and opportunities!
Flipper/Rehabber · Minneapolis, MN · Member since 2016 · 1k+ posts · 1k+ votes
8y
@Rafik Moore many of us have heard of them, there have been some discussion on here prior. There is still some clarification needed on this, it could be a pretty big deal if it can be paired with the new markets tax credits. This impacts certain investors more than others, a long tern seasoned investor with appreciated assets will have more opportunity than someone starting out.
Are you here to ask questions about it or are you just looking to promote your fund?
Real Estate Broker · Greer, SC · Member since 2013 · 548 posts · 271 votes
8y
Even gains you thought were gonna create a tax this year that are not with a QI can be deferred till 2026 if you invest in a opportunity fund. We have redeployed cash from an apartment disposition, that we temporary used to close on a development project, into a opportunity zone. It was like having your cake and eating it too.
Even gains you thought were gonna create a tax this year that are not with a QI can be deferred till 2026 if you invest in a opportunity fund. We have redeployed cash from an apartment disposition, that we temporary used to close on a development project, into a opportunity zone. It was like having your cake and eating it too.
You already have money invested into a qualified opportunity fund? Any red tape to this? I thought we were still waiting on some guidance but I haven't checked in a while.
Real Estate Broker · Greer, SC · Member since 2013 · 548 posts · 271 votes
8y
We have property purchased in an opportunity ZONE. Its my understanding from CPA that the FUND now can be created relativity simply with some documentation at tax time. Yes, we are still waiting on details on how much has to be spent on improving properties etc. from IRS. The one property I'm betting on with my gain is getting more cash spent on updates than we paid for it. So the bet is pretty safe.
Specialist · Virginia Beach · Member since 2018 · 42 posts · 9 votes
8y
@Jason
@Jason Dillard with opportunity funds the red tape right now is in the form of 2 things. With regards to zone stock (A C-Corp) has to be established after 12/31/17 and you will need an Private Offering Memorandum, follow SEC 506(d) rules and regs. If zone partnership (which still needs clarification from congress) a LLC is set up and a solid operating agreement has to be clearly set up. Keeping in mind that any fund that gets established has rules as to how much of the fund has to be spent, where spent at, who invested, how much invested, and the fund registered with Dept. of Treasury via the IRS self certification form. (Although that will be more than likely changing over the next 24 months). The absolute safest way to set up a fund at this time is Zone Stock. There have been no letters requesting more clarification or updates regarding zone stock. I don't think there will be either...because C-Corp and stock has to be registered with SEC the moment you accept funds. So there is a governing body in place for investors to turn already.
Real Estate Broker · Greer, SC · Member since 2013 · 548 posts · 271 votes
8y
@David Sillaman
I'm not raising money for fund. We are buying in a zone and putting properties we buy in fund. I believe there is less red tape this way.
Specialist · Virginia Beach · Member since 2018 · 42 posts · 9 votes
8y
@Jason Dillard You still have to set up a OZ Fund either as registered C-Corp est after 12/31/17 or a Zone Partnership. I would look at IRC 1400z-2. The guidance although grey in some areas at the moment, doesn't indicate you can just buy property in Opp Zones and claim any benefit. Now if you don't care about the capital gains deferment at all and don't plan to file then it's really no different than just buying property and no need for a fund at all. There is just no tax benefit without the fund. The purpose of the fund is to be registered via the IRS with Dept of Treasury, and that is how the IRS will know what funds and what properties the funds are investing into. Hope this helps.