By now you have probably heard about Qualified Opportunity Zones. But did you know QOZs are not limited to the urban core?
QOZs were chosen by local and state officials out of each individual state's Low Income Census Tracts. Each state's lists was submitted to the federal government for review and approval. California's approved list was released in Q2 2018.
-- Deferral of Capital Gains Tax owed
-- Elimination of Capital Gains Tax liability on future Capital Gains from the investment in a QOZ
So what's the catch?
-- The subject property must be located within a Qualified Opportunity Zone (QOZ)
-- Ownership of the property must transfer to a special purpose vehicle called a Qualified Opportunity Zone Fund
-- The original property owner may be limited in the equity they can hold in the QOZ project
-- To maintain QOZ status, the project must make "substantial improvements" to the property within 30 months of acquisition by the QOZ Fund
-- Substantial improvements must be equal to or greater than the cost basis for the subject property
-- For maximum Capital Gains Tax shelter, the QOZ Project must operate for 10 years and one day
Got questions or want to know if your property is located in a QOZ? I am happy to chat. Email me: firstname.lastname@example.org or call (213) 448-8266