Dean Mead’s Estate and Succession Planning Department is one of the largest and most respected groups of estate planning attorneys in Florida. We are frequently…
The U.S. Treasury announced exciting news for eager investors this week in publishing the approved list of qualified sites for the new Opportunity Zones for all 50 states. Florida successfully had 427 Opportunity Zones approved from its list – creating unique areas in every Florida County upon which improvements may be developed using this new tax incentive investment opportunity. This could yield a huge business investment and diversification opportunity for many of Florida’s rural counties that have not enjoyed the same business resurgence as the rest of the State since the great Recession of 2008.
We have introduced the concept of Opportunity Zones in a previous blog article, which can be found here. But, generally, Opportunity Zones originated from the 2017 Tax Cuts and Jobs Act. That Act incentivizes investment in low income communities by allowing investors to sell assets and enjoy a tax deferral (and potential tax elimination) on the otherwise taxable gain realized from the sale of those assets. To participate, investors must invest the monies from the sale of an asset in a “Qualified Opportunity Fund”. The Qualifying Opportunity Fund is a partnership or corporation which holds at least 90% of its assets in property located or used within a “Qualified Opportunity Zone”. These Qualified Opportunity Zones are low-income communities nominated by the executives of each state as areas in which reinvigoration and revitalization through reinvestment required special incentive. The nominations were sent to the U.S. Treasury for confirmation, and, until now, had yet to be confirmed in many of the 50 states. Now, however, the U.S. Treasury has confirmed which nominations will qualify.
The official list of Qualifying Opportunity Zones for all 50 states can be found here. This link gives you the census tract number of each zone. But, you need a census tract map to be able to locate the property assigned to a particular census tract number. The census tract map for Florida can be found here. You will note that Florida’s census tract map does not actually contain the full census tract number (at least, not in any particularly easily identified location). Instead, Florida’s census tract maps merely contain only three to six digit numbers labeling certain parcels. The labels do, however, correspond to a certain census tract number. A list of the corresponding tract numbers can be found here. These three links will be a great resource to determine the areas in which both business and real estate investors should be paying close attention.
This legislation opens up new and previously untapped markets to foreign and domestic investors. Despite finally confirming which nominated areas formally qualify as Opportunity Zones, we are still waiting for the all-important regulations from the U.S. Treasury to confirm exactly how this process will work. We do not expect those regulations, however, until late summer 2018.