Qualified Opportunity Zones?

10 Replies

Hi @Gary F. , I'm not so sure what the advantage is, honestly. If an investment happened to be in one, okay great. But I wouldn't search out an investment just for the OZ designation. 1031 exchanges are BAU for most investors and accomplishes the same goal.

HI @Gary F. I don't think this part of the new tax law has even been implemented yet.  I believe the IRS is still putting it together.  Each state has identified their chosen their respective OZ's but that's about it.  As @Jaysen Medhurst point out, far easier to do a 1031X.

Although it is effective by law, the Treasury has yet to release Regulations. We are awaiting on further guidance from the Treasury/IRS before advising clients accordingly.

I have been heavily researching this topic and I have laid out the steps to make it possible for me to use this a great advantage!

1st- Start a partnership and get an EIN number

2nd- open up a bank account in your funds name

3rd- take capital gains and invest into a buy and hold in the QOZ

4th- Collect rent, let the tenants pay down the mortgage and then sell after year 10 for the biggest tax advantage

I flip about 6 houses a year- 2 of the 6 flips I will take the profit and put into the Fund bank account then execute one of my option contract that I have for houses that I know that would qualify for QOZ.

I plan on buying 4 a year using this strategy but I will also wholesale any properties or opportunities I come across in my QOZ!

Originally posted by @Kendra Ellis :

I have been heavily researching this topic and I have laid out the steps to make it possible for me to use this a great advantage!

1st- Start a partnership and get an EIN number

2nd- open up a bank account in your funds name

3rd- take capital gains and invest into a buy and hold in the QOZ

4th- Collect rent, let the tenants pay down the mortgage and then sell after year 10 for the biggest tax advantage

I flip about 6 houses a year- 2 of the 6 flips I will take the profit and put into the Fund bank account then execute one of my option contract that I have for houses that I know that would qualify for QOZ.

I plan on buying 4 a year using this strategy but I will also wholesale any properties or opportunities I come across in my QOZ!

Hi Kendra, 

You need to generate capital gains to invest into the QOZ. 

Flipping a house generates ordinary income tax- so you won't be able to utilize that and get any tax advantages from buying a house in a QOZ.