Opportunity Zone Magazine Opportunity Zone Magazine Volume 1, Issue 1 | Page 60
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OPPORTUNITY ZONE MAGAZINE | VOLUME 1
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ISSUE 1
advice is simply best practice advice and not a mandatory
rules when creating a QOF.
As is stands, in order to invest into a QOZ, a taxpayer must
first invest in a QOF. The term “qualified opportunity fund”
means any investment vehicle, which is organized as a
corporation or a partnership. The corporation or partnership
must be created for the purpose of investing in QOZ property
and that fund must hold at least 90 percent of its assets in
qualified opportunity zone property. An individual can follow
these rules and simply self certify.
Though it is recommended, not all QOF are going to have
tax experts, financial advisors, experienced professionals
to give the investors in these funds guidance as to their
investments relates to the more nuance rules of QOZ’s.
The ability for an individual to self certify will cause a
gross discrepancy amongst the kind of QOF’s. Institutional
investors with the resources to obtain and coordinate
experts who can help navigate taxpayers through this new
tax benefit will be positioned to address unforeseen issues
that may arise. However, less seasoned investors who are
simply starting a fund because they heard this was a great
way to lessen their tax burden may not take the proper steps
when issues arrive and may possibly expose taxpayers to the
very taxes the hoped to avoid.
...there are many areas
of concern but the concerns
do not outweigh benefit
of QOZ’s.
As with anything, there are many areas of concern but the
concerns do not outweigh benefit of QOZ’s. The fact remains
this is a great opportunity for the low-income areas that are
traditionally left out of the growth and increased vitality of an
economy during recovery. The passing of QOZ gives investors
an amazing tax benefit with the hope that they go into these
low-income areas and make significant investments.
1031 exchange is an amazing tax benefit that helps millions of
investors protect their capital and provides incentives to reinvest
back in the economy. With the passing of QOZ, those same
investors are not able to protect their capital on a broader level,
but they can also gain eligibility for exemption. Of course, there
will be some scenarios where a 1031 exchange still makes better
sense for a taxpayer’s strategic tax planning goals, but with the
introductions of QOZ’s, taxpayers now have more options to
better protect their capital and reinvest into the economy.
L ance G rowth is chief executive officer and co-founder of
Growth 1031. As a graduate of the Thomas Jefferson School
of Law, Growth focused his legal education in the conveyance
of property and tax law. Growth’s entire professional career
has been in the field of 1031 exchange, working as both an
accommodator and a business development director. Outside
of work, Growth is also the co-founder of the Collective Access,
a nonprofit that connects kids to professionals. He also worked
in government as a representative for former San Diego City
Council President Myrtle Cole.
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