FEATURED ARTICLE: Will Opportunity Zones Boost America's Distressed Neighborhoods?

A caution: The rules for qual- ified opportunity funds have not been finalized as of this writing. Investors should work with attor- neys, investment advisors and tax professionals to assure they fully understand how Opportunity Zones work and the pros and cons asso- ciated with them before investing. “property” can be stock, a part- nership interest, real estate, or a business (a QOZB). However, a QOF cannot own “debt, stock, partner- ship interests, options, futures con- tracts, forward contracts, warrants, notional principal contracts, annu- ities, and other similar property.” Also on the banned list are in- vestments in golf courses, country clubs, massage parlors, hot tub facilities, and suntan parlors. Racetracks, gambling dens, and take-out liquor stores are similar- ly prohibited. QOF INVESTMENT OPTIONS A qualified opportunity zone While it is difficult at this early stage of Opportunity Zone capital raising to estimate the potential size of the market, the Treasury Department estimates approximately $100 billion in private capital could be invested in Opportunity Zones.”

circumstances, at least 50% of the gross income of a qual- ified opportunity zone busi- ness must be derived from the active conduct of a trade or business in the qualified opportunity zone. state can adjoin an Opportunity Zone and have a median family income not greater than 125% of the neighboring low-income community. In other words, in- vestors under the program are able to put money into census tracts with a stronger econom- ic profile than the prototype O-zone. • A QOF, says Toni Nitti, an Aspen-based CPA writing on, may sell its as- sets “at any time before 2048 and the taxpayer (can) exclude • Up to 5% of the Qualified Opportunity Zones in each

WHERE TO FIND QUALIFIED OPPORTUNITY FUNDS Neither the Treasury Depart- ment nor IRS publish lists of QOFs. However, it’s clear that in a short time a large number of opportunity funds have emerged. Novogradac, a tax, audit and con- sulting firm, has a free Opportunity Zone Resource Center with more than 100 QOFs. As of mid-April, the Novogradac list included funds with $26 billion in investing capacity. The National Council of State Housing Agencies (NCSHA) pub- lishes a free Opportunity Zone Fund directory which, as of March, in- cluded more than 100 funds rang- ing in size from $1 million to $3 billion with an average size of $224 million. In total, more than $24 bil- lion has been raised by Opportunity Funds according to NCSHA. James Tassos, Deputy Direc- tor of Tax Policy and Strategic Initiatives with NCSHA, tells the Housing News Report that “ap- proximately 36 percent of the 117

the gain resulting from the sale.” (parenthesis added)


10 think realty housing news report

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