ELI5?
Invest your capital gains in poor parts of America and avoid tax. Part of Trump's tax bill. For example if you held your RSU and now sell them for a big gain you could use this to avoid tax. But your investment gets locked in 10yrs.
What is the rate of return for such investments ?
Same question. where is it in Seattle? Is it worth it? Anyone take advantage of.it?
OZ are BS! You need to invest in asset for 10 years, it could be a total bust or gold mine! You are paying someone asset management fees while getting screwed!
Not really. You are taking cap gains made elsewhere and investing into a property in an opportunity zone. The property could be cashflow positive. There is a step up in basis in terms of cap gains owed at the end of the period +10yrs). This could be substantial if the cap gains you originally invested we're significant.. off course things could drastically sour in 10 yrs.
Majority of OZ investments are in secondary and tertiary markets. Most real asset managers will make an asset management fee if you invest through a fund, at the end of the 10 years, you have a short window to sell the asset! If we are in a recession, you are screwed! The developer / asset manager made a boat load of feeds, if the deal is bust then you are double screwed on taxes. 10 year CRE investment will bring down IRR returns. Don’t get fooled by some asset managers investing in secondary or weird markets.
Yes!