According to the May 22 2020 article written by Ayesha Rascoe, NPR White House reporter, once the coronavirus pandemic hit, Republican Senator Tim Scott, the leading sponsor of the 2017 Opportunity Zone legislation called for the US Treasury Department to extend deadlines for investing capital gains in over 8,700 certified opportunity zones across the country.
The current Opportunity Zone legislation allows investors to defer and lower the tax owing on long term and short term capital gains earned from the sale of shares, a business, and real property to 2026, provided the gains are invested in certified opportunity zones.
Proposed Opportunity Zone Program Extension
One Republican-sponsored bill in the House of Representatives would extend the overall program to 2030 to allow more time for investments and for the payment of the reduced tax owing.
South Kauai Opportunity Zone
An extension of the Opportunity Zone program would be welcome here in the South Kauai Opportunity Zone. Our community has been flourishing from the recent Opportunity Zone investments at Kukui’ula. Investors are purchasing ready-to-build homesites with the plan to improve the sites with vacation rental homes in order to produce the business income required in the legislation rules.
Local architects, engineers, contractors, and landscapers are productive and hiring. Local tradespeople are fully employed and earning living wages. As projects move through to completion, local interior designers, artists, and furniture stores will benefit, followed by local property management and maintenance companies.
If the OZ property is held by the investor for 10 years, the appreciation when the property is sold is tax-free. It is my understanding if the property is sold within the 10 year period and replaced with Opportunity Zone property, the original OZ property basis is transferred to the new OZ property provided that intent is outlined in the initial OZ investment plan.
Want to Know More?
Contact me for South Kauai opportunity zone investment ideas, and consult your tax advisers.