Venture capital-backed tech startups bring skilled jobs (and lunch crowds) to low income neighborhoods
Startups and small businesses based in designated opportunity zones offer tax-advantageous alternative to OZ real estate funds, yet are overlooked.
By: Compound Asset Management, Inc.
NEW YORK - Nov. 11, 2019 - PRLog -- Maximum Opportunity Zone Tax Discount Expires on December 31, 2019
The purpose of the Opportunity Zone ("OZ") legislation was to create jobs and prosperity in neighborhoods that had not experienced the same growth as more affluent areas. The program allows for investment in opportunity zone funds to defer and reduce existing capital gains tax as well as realize future capital gains without any tax liability, with the maximum discounts expiring on December 31, 2019.1
However, nearly all the capital has flowed into OZ funds focused on real estate. Only a mere 2.6% of the $3.2 billion that has been raised for opportunity zone funds is intended to invest in operating businesses. These businesses, which hire new employees and support local businesses, stand a far better chance of achieving the designed benefits of the program than real estate development.
One such company, Compound Asset Management, Inc. is a venture-backed fintech company and QOZ business that has established its headquarters in a storefront on the Lower East Side, in one of the five designated opportunity zones south of 125th Street. There are only a few opportunity zones in Manhattan, and they are predominantly concentrated in Upper Manhattan.
"Not only will these businesses create jobs and prosperity outside the major business districts of Manhattan, but current and future investors will participate in the unique capital gains tax benefits that come with opportunity zone businesses,"
About Compound Asset Management, Inc.
Page Updated Last on: Nov 12, 2019