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I know a bit about Opportunity Zones (roommate bought property that was subsequently designated one, to his delight), but not about the funds. Do you have any p

I know a bit about Opportunity Zones (roommate bought property that was subsequently designated one, to his delight), but not about the funds. Do you have any particular recs on where I can read up on them?

bklyn11201 7y ago
This is likely the best first stop for OZ info from a reputable source: https://www.novoco.com/resource-centers/opportunity-zones-resource-center https://www.novoco.com/resource-centers/opportunity-zones-re... The timing restrictions around OZ investments (180 days after cap gains event) make it a bit difficult and will result in lots of bad investments with non-experienced, first-time fund owners. But maybe you have a connection to an OZ that you are familiar with and can rehab a property there. You should get help from a CPA and lawyer, but the basic process would be: 1) Sell stock and now you have cap gains 2) Setup OZ Fund XXX LLC 3) Fund the LLC with your cap gains within 180 days 4) Setup OZ Property YYY LLC 5) Purchase property inside the YYY LLC and fund purchase with XXX LLC 6) Rehab property within 31 months 7) Hold for 10 years a) Pay original cap gains tax bill (minus 15%) in 2026 tax year (negative interest loan from gov) b) Pay zero cap gains on the increase in property value over the 10 years
aoeusnth1 7y ago
Here's an example fund, https://fundrise.com/offerings/opportunity-fund/view https://fundrise.com/offerings/opportunity-fund/view, but it has steep fees: Annual investment management fee 0.75% Annual tax and accounting fee 0.45% Annual carried interest / promote 15% over 8% return Maybe it's not as high when you consider that they purchase the property directly, but it still seems a bit too risky to lock myself into those high fees for 10 years. I think the main benefit is the 7 year deferment of your capital gains, which given that your money will be compounding from that point onward, is a pretty significant break if you have a lot of gains you haven't triggered yet.
- bklyn11201 7y ago
  Main benefit has to be the zero capital gains you pay (on the new gain) if you are patient and hold for the full 10 years. Second benefit would be the cap gains deferral (negative interest loan).
godzillabrennus 7y ago
https://www.activatedcapital.com/resources.html https://www.activatedcapital.com/resources.html Good resources on that page.

bklyn11201 7y ago

This is likely the best first stop for OZ info from a reputable source: https://www.novoco.com/resource-centers/opportunity-zones-resource-center https://www.novoco.com/resource-centers/opportunity-zones-re... The timing restrictions around OZ investments (180 days after cap gains event) make it a bit difficult and will result in lots of bad investments with non-experienced, first-time fund owners. But maybe you have a connection to an OZ that you are familiar with and can rehab a property there. You should get help from a CPA and lawyer, but the basic process would be: 1) Sell stock and now you have cap gains 2) Setup OZ Fund XXX LLC 3) Fund the LLC with your cap gains within 180 days 4) Setup OZ Property YYY LLC 5) Purchase property inside the YYY LLC and fund purchase with XXX LLC 6) Rehab property within 31 months 7) Hold for 10 years a) Pay original cap gains tax bill (minus 15%) in 2026 tax year (negative interest loan from gov) b) Pay zero cap gains on the increase in property value over the 10 years

aoeusnth1 7y ago

Here's an example fund, https://fundrise.com/offerings/opportunity-fund/view https://fundrise.com/offerings/opportunity-fund/view, but it has steep fees: Annual investment management fee 0.75% Annual tax and accounting fee 0.45% Annual carried interest / promote 15% over 8% return Maybe it's not as high when you consider that they purchase the property directly, but it still seems a bit too risky to lock myself into those high fees for 10 years. I think the main benefit is the 7 year deferment of your capital gains, which given that your money will be compounding from that point onward, is a pretty significant break if you have a lot of gains you haven't triggered yet.

bklyn11201 7y ago
Main benefit has to be the zero capital gains you pay (on the new gain) if you are patient and hold for the full 10 years. Second benefit would be the cap gains deferral (negative interest loan).

godzillabrennus 7y ago

https://www.activatedcapital.com/resources.html https://www.activatedcapital.com/resources.html Good resources on that page.