Opportunity Zones the Hype and Reality By David Larson

     Reno and Sparks as well as Storey County are on the map.  That map is the Opportunity Zone Map.  Opportunity Zones were created to drive economic development in low-income neighborhoods through the Tax Cut and Jobs Act of 2017 (TCJA).  Properties investments in Opportunity Zones allow you to:
·  Re-invest any form of capital gains. Like-Kind not required
·  Defer your taxes on your original capital gain until the end of 2026.
·  Reduce your taxes by up to 15% when you invest in an Qualified Opportunity Fund for at least 7 years.
·  Completely eliminate the tax on new capital gains from your Qualified Opportunity Fund investment after the 10-year mark.
   Deferring or eliminating capital gains tax on a real estate investment is huge.  Some owners of investment properties will see an increase in the value of their properties by being included in the Zone.  Some investors will target only properties in an Opportunity Zone.  The Opportunity zones promised an influx of cash investments in blighted areas.
   The reality has been a little different.  With all the hype, the cash investments have been much less than expected.  Unfortunately, the maps placing properties in the Opportunity Zones seem to be done in haste with political motivations placed above practical needs.  The Tahoe Reno Industrial Park with the Tesla Gigafactory has been one of the main drivers in our area’s diversifying economy.       Organically, its growth was astounding and yet it was mapped out as an Opportunity Zone.  Much of Downtown Reno and Sparks are included in the Map whose boundaries seem to me to be somewhat arbitrary.
   For further details on opportunity zones go to:  www.cdfifund.gov/Pages/Opportunity-Zones.aspx. 
   For an evaluation of your property’s value and variables that affect the value, please give us a call for a free consultation.