New ‘Opportunity Zones’ Offer Tax Bene …

BY STEVE DINNEN

Opportunity Zones are coming, and they offer a way to spur economic development in depressed areas while providing great tax shelters.

The zones were created as part of last year’s federal tax overhaul. They allow states to designate lower-income census tracts as areas where investors can kick money into funds that will be used to start some kind of business. There are 62 zones across Iowa, with two in Des Moines and one in West Des Moines. Investors need not live in a zone to participate in one.

Investors will pour money into a fund from proceeds they receive from a prior investment. So if you score a $100,000 gain on a stock sale, for instance, you can roll that into an Opportunity Zone fund and defer taxes on the gain. If you leave the money inside the fund for the 10-year life span, you get a stepped-up basis and avoid taxes on the original gain plus anything that may accrue by way of the investment.

Details are still being formulated by the U.S. Treasury. Yet to be settled: who will administer these funds, how they will select an investment, and who will manage the investment.

The Iowa Economic Development Authority is handling things at the state level.

You May Also Like

Our globe-trotting greenbacks

By Steve Dinnen I like greenbacks. So does Zimbabwe, which demanded $30 worth of ...

Investing With an Eye Toward the Greater Good

Above: Noel Friedman, MSCI, right, addresses a crowd as Samantha Azzarello, J.P. Morgan, left ...

Some credit card companies are willing to deal

By Steve Dinnen The annual fees for credit cards can range from easy, as ...