Jason starts the show with stating that, “if you’ve recently sold a business, have a stock position with a lot of long-term capital gains, or thinking about selling a piece of real estate with a lot of appreciation, you need to listen to this show and pay tons of attention”. Alex chimes in stating, that this is one of those opportunities that is relatively new. Only three years old. Alex mentions the beginnings of 401(k)s and 1031 exchanges as examples. If you have a potential liquidity event coming up, you may want to pump the brakes before paying the taxes and investigate Qualified Opportunity Zone Fund (“QOZs”).Jason explains that basically, three years ago, legislation was enacted through the Tax Cuts and Jobs Act, that focuses on creating growth and job opportunities in underserved communities, into which new investments may be eligible for enhanced tax treatment. Alex adds that this is not only a tax benefit but also provides a new investment to invest in and helps our country. Jason states “Profit with a Purpose” stealing a line from Urban Communities, a real estate partner.

He continues that Urban Communities purpose is to totally renovate communities and create an unbelievable lifestyle for their residents with new apartment homes, workout classes and gardens. Alex adds that energy efficiency is also a big topic of this program. Jason circles back, calling out to investors who have sold a business or have a concentrated stock position with large capital gains, QOZs will give you some tax benefits. QOZs have been designated across all fifty states. Currently there are 87 hundred QOZ funds available. However, you need to be careful about who you invest with. Alex adds that there are pros and cons to this and to think about where you are investing. Typically, these are areas where no one has wanted to invest in previously. What are the benefits of this investment? Does this real estate group have a track record of adding benefit to underserved communities?Jason segue’ s into the three major tax benefits of QOZs: deferral of the recognized capital gains, reduction of capital gains, and elimination or tax-free returns on QOZ investment.

He further goes into outlining the timing of investment and time periods required to gain full benefits. Alex mentions that from what he is hearing from Jason, this is not something that an individual will be reviewing on their own. A team of investment professionals will be required to execute due diligence and research on all the investment options. He adds that Intelligence Driven Advisers is currently reviewing a QOZ fund that is looking to raise a billion dollars. Big players are involved in this space. Jason adds that real estate developers involved are some of the biggest companies in the country with long track records. Players like, Clarion and Related. He adds that he would ONLY invest in a company or group with a long-term track record. Alex asks for clarification, as earlier mentioned, QOZs have only been around for a short time. Alex and Jason confirm that you should look for companies that have a history in “substantial or original development”. Jason further drills down into the renovation requirements placed on the development companies.

Basically, the purchase of a 20-million-dollar building will require an additional 20 million in renovation to qualify as a Qualified Opportunity Zone. Jason goes on to share his personal experience with an investment into an underserved community and how moving it was to see an area that was rundown go through gentrification. Jason continues with breaking down the potential tax benefits with giving examples based on dollar figures and how the deferrals can provide other investment opportunities. Jason closes out the show with stating, there is way too much to cover in a twenty-five-minute show, so please contact us if you have additional questions. Jason invites listene