BY STEVE DINNEN
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.