St. George, UT, November 08, 2018 --(PR.com
)-- Sean Parker is famously known for Napster, the music download platform that provided the masses with a secure download scheme to have their favorite music at their fingertips free of charge; cheating musicians of their rightful royalties one song at a time.
Call it redemption if you will, but this same Sean Parker, yes even that same Sean who was, for a time, the president of Facebook, not The Facebook, of course, has created the Economic Innovation Group that invented the idea of Opportunity Zones. These zones provide incentives and encourage investments in lower income, rural communities across the nation.
Congress passed The Tax Cuts and Jobs Act of 2017 allowing reinvestment of profit into Opportunity Zones with tax-deferred status and in some cases, one hundred percent tax-free.
Governor Herbert said, “Our goal is economic prosperity for all Utahns. Opportunity Zones will go a long way in helping to support growth in economically-distressed areas throughout the state. By working with these communities, the zones will attract more businesses and new investment.”
There are 8,700 opportunity zones in the United States, Utah has 46 of these special zones. According to James Rose of Rose Development
, "There are approximately five Opportunity Zones here in Southern Utah between Beaver and St. George." Rose continued, "Not only do we have these opportunities in front of us, but we also have the means to implement these investments in the timelines given to investors by Congress written in the law. Even if you secure the funds for these special Zones, the development of the project needs to begin within the six month period after the funds are appropriated." James Rose specializes in development and Opportunity Zone investment in Utah.
Opportunity Zones allow investors to defer and if enough time has lapsed, eliminate capital gains tax.
Lyndi Rose gave a great example that seemed to bring it all home. Lyndi said, "Let's say you bought a home in California 20 years ago for 500k. And let's say that you sell that house for 2.5 million today. Under the new tax laws, you can take your initial investment, or basis, and keep that money for yourself tax-free." She continues, "You can also make the 2 million dollars of profit and reinvest that money into something different and defer the taxes. For example, you could invest that 2 million into an Opportunity Fund and if you leave that money for ten years you can take the profit from your investment without paying taxes on your capital gains. Even if you were to leave the money for five years, you would still see a massive tax incentive on your capital gains. And this applies to stocks as well as other investment gains."
When asked where she would put her money she said, "If you cash out stock you can now invest that money into real estate, whereas before you would need to invest that money back into another investment that was "in-kind" or another stock. You don't have to do that anymore, now many people are hedging against downturns in the market with real estate investments, and more precisely, Opportunity Zone real estate so they can take advantage of the new tax laws."
Opportunity Zones are relatively new, and most people haven't heard of them. One thing is for sure; they are changing the landscape of the investment world and reinvigorating rural America.