Despite and maybe even because of COVID, Opportunity Zones are front and center in the investment world. The wealthy have the ability to make long-lasting impact on our nation’s marginalized communities and to do so with unique financial benefits. If done right, investing in Opportunity Zones will be a win for all.

Some Opportunity Zone (“OZ”) basics:

Opportunity Zones 101

What are they? Think tax-advantaged investment incentives on PEDs
Who do they help? Imagine a barbell with the wealthy and not-so-wealthy
How do they work? Simple concepts, devilish details
Where are they? Every US city, just about
When are  they? Now, but not forever
Why do they exist? Good question!

Opportunity Zone legislation provides incentive for trillions of dollars of idle wealth to be put to work in our communities that need it most. It offers tangible and intangible investor reward.

Opportunity Zone Investor Benefits
Use profit or capital gains from any investment type.
Only the gains need to be invested. Original basis can be used for any other purpose.
Capital gain tax payment may be deferred until 2026.
Profit on the new investment may be tax-free.

Some examples of OZ investment purpose.

  • Help solve the affordable housing crisis – invest in housing in the Bay Area
  • Invest in San Jose where Google is also planning a massive new project.
  • Invest in marginalized sections of growing cities – imagine building the next SoHo or SoMa.

If you have questions about Opportunity Zones and how they could work for you or vice versa, a good place to start would be with your trusted accounting advisor. Whether OZ will meet your needs is a personal decision based on your financial obligations and goals.

About the Author

Originally from the Boston area, John now lives in Davis, CA and is a Managing Director with Marwood Company, a real estate investment company based in San Jose active with Opportunity Zone projects.

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