Qualified Opportunity Zones?

Question

I just heard about this alternative to tax deferral.  Anyone done one of these and have experiences to share?

Lance Lvovsky · Answer

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.

Mendel Raksin · Answer

https://eig.org/opportunityzones/about

https://www.biggerpockets.com/forums/61/topics/609...

David Cruice · Answer

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.

Natalie Kolodij · Answer

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.

Kendra Ellis · Answer

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!

Jaysen Medhurst · Answer

Thanks, @Mendel Raksin. Can you point us to a link with more info?

Jaysen Medhurst · Answer

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.

Qualified Opportunity Zones?

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