From a small northwestern observatory…

I’ve been gone for a while — took a wonderful trip to Egypt in late January and early February and I’m just getting back in the swing of things.  One of the big items on my agenda right now is the creation of Opportunity Zone Funds.  This portends to be very real shot in the arm for disadvantaged neighborhoods across the U.S.

In short, certain census tracts have been designated as Opportunity Zones under the new tax laws passed in 2017.  Opportunity Zone Funds can be created to invest in those zones.  Investors in those funds may defer gains on the sale of businesses and stocks by reinvesting the proceeds in a qualified Fund.  In a way, this is similar to 1031 exchanges which have been available for real estate sales for many years.  However, unlike the 1031, any business gain can be invested.  Further the creation of a Fund alleviates the burden on the taxpayer from identifying specific new investments — that will be the responsibility of the fund.  Further, 1031 exchanges carry a 180 day time clock for identifying and closing new investments, but these new Funds have much more liberal — and reasonable — time frames.

At Greenfield, we’ve identified over 100 potential new funds which are being organized around the country.  As with any new investment, the likelihood is that most of these will never get off the ground.  However, Greenfield has identified several already which are both well-organized and backed with serious money. We will continue to keep you apprised of these projects as they move forward.