A new type federally qualified investment vehicle known as anopportunity fund allows individuals and entities facing capitalgains taxes to defer and reduce their tax bite, while paying noadditional tax on appreciation of the investment. The only catch isthat investment has to be limited to designated areas known asopportunity zones, and the real estate investment requiressignificant capital improvements to the asset (generally ground upconstruction).

➤➤Join the GlobeSt.com ADAPT: Opportunity Zonesconference September 16-17 in Baltimore, MD The new nationalconference series is aimed at identifying Opportunity Zones acrossall property types and geographic regions. This first-of-its-kindevent will educate, connect and celebrate the investors, developersand owners with the people behind the planning and decision-making,such as architects, consultants, academics and, most importantly,municipal officials. Clickhere to register and view theagenda.

It sounds like a great deal for investors, and it is. But in therush to defer gain and supercharge yield, it's important toremember that these deals have to pencil out. Otherwise not onlythe yield but the initial investment can be at risk.

What Are Opportunity Funds?

Opportunity funds were created by the Congressional Tax Cuts andJobs Act of 2017 to encourage affordable housing and businessdevelopment in economically struggling communities. OpportunityZones have been designated nationwide by Federal and state economicdevelopment authorities.

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