Opportunity Zones Explained - Riverside Abstract

NEW YORK - Nov. 29, 2018 - PRLog -- The new community development program, Opportunity Zones, was established by the Congress in the Tax Cuts and Jobs Act of 2017, in order to encourage long-term investments in economically-distressed communities nationwide that are nominated by governors and certified by the Treasury Department.

This idea originated from Sean Parker, the former president of Facebook and creator of Napster. Parker formed the Economic Innovation Group, a Washington think tank in 2013, to help him press the policy into law.

The Opportunity Zones provides real estate investors with the opportunity to defer or even eliminate capital gains tax if they reinvest their profit into an Opportunity Zone Fund.

Throughout the United States, there are roughly 8,700 Opportunity Zones, selected by state governors and certified by the U.S. Treasury Department.

This law allows taxpayers to postpone taxes on profits from the sale of any property until 2026, on the condition that the profits from the sale are reinvested in an Opportunity Zone fund. This fund, in turn, invests the capital in businesses in a targeted community. Also, any gains that arise from investing in the fund are tax free, only if the fund is held for 10 years.

For example: Assuming that a profit of $200,000 is obtained from the sale of stock in a public company. If this profit is reinvested in an Opportunity Zone fund, the taxpayer can postpone capital gains taxes until 2026. It the shares of the Opportunity Zone fund are held for five years, the deferred gain of $200,000 is reduced by 10 percent, to $180,000. If the shares are held for 7 years, the deferred gain is reduced by another 5 percent, to $170.000. And, if the shares are held for 10 years, the investor pays ZERO capital gains tax on the appreciation of that asset.

That means, if the investor sells the fund shares for $300,000, the entire $100,000 gain could be excluded from tax (the basis would be $200,000, even though only $170,000 of deferred gain had been recognized).

Opportunity funds may be established by investment banks, syndicators, or anyone else.

This is a basic explanation about how the Opportunity Zones program works and what the tax advantages of the Opportunity Funds are.

After the Treasury Department released rules governing opportunity zones last month, questions surrounding the program have only increased. For this reason, Riverside Abstract is hosting an opportunity zones conference on November 29^th at 1:30PM EST to answer the many questions that remain. The event will take place at the Penn Plaza Pavilion. Experts from Stroock, Meridian, KPMG, Young Woo, Cadre, and EJF Capital will be there.

The host of the event, Riverside Abstract, has packed the schedule with practical, informative sessions that will give you the information you need to reap the rewards you've been hearing about. Top it all off with an epic holiday party to get you networking.

Some of the topics that will be covered are:

·        A high-level overview of Opportunity Zones and Qualified Opportunity Zone Funds

·        Overview of opportunity zones & the latest guidance from Treasury & the IRS

·        Qualified opportunity funds sponsors & the types of investments they are seeking

Learn more about this premier event for real estate professionals looking to capitalize on the new realities of investing in Opportunity Zones on the following link: https://go.theriversideexperience.com/opportunity-zone-co....