21 Sep Helping Clients Benefit from Opportunity Zones
This week’s webinar featured three highly accomplished industry veterans, namely, Felicia Hardy, Bo Kemp and Bennett Johnson III. These professionals shared their expertise and ideas for how you can help your clients take advantage of a powerful and often overlooked tool in the form of opportunity zones.
Felicia Hardy is CEO and Founder of Intuition Enterprise, Inc. whose Merger and Acquisition Advisory Team works with buyers and sellers for both main street and midsize market transactions. Hardy holds an Executive MBA from the University of Michigan as well as a Masters in Mechanical Engineering and a Bachelors in Electrical Engineering from Purdue University.
Bo Kemp is Senior Director of Faegre Baker Daniels Consulting and a graduate of Yale University and Harvard Business School. His experience includes partnering with a national network of advisors, advocates, governments and business leader for the purpose of driving growth. Over the years, Kemp has built a reputation for fostering innovation in municipal utilities and public infrastructure. Kemp led Cory A. Booker’s transition to the office of Mayor of Newark, New Jersey. He became interested in opportunity zones while chief operating officer for the city of Newark during the tenure of Cory Booker, who is now a U.S. Senator and one of the coauthors of the opportunity zone legislation.
Our third panelist, Bennett Johnson III, has 25+ years of experience in the public and private sectors. He holds a BA in Biomechanical Engineering Sciences from Harvard University and a Master’s Degree in Industrial Relations and Personal Management from the London School of Economics. Johnson served as the City of Chicago’s Budget Director in the Office of Budget and Management where he was responsible for preparing and executing the city of Chicago’s $6 billion annual operating budget.
What Are Opportunity Zones?
Opportunity zones were created by the Tax Cuts and Jobs Act of 2017. There are many benefits to opportunity zones, which allow for certain types of investments in lower income areas to have often considerable tax advantages. Clients looking for innovative ways to address capital gains tax will find that opportunity zones may just be a powerful tool worth a good long look.
During our panel, we learned that there are a whopping 8,700 designated opportunity zones across the country. There are opportunity zones in every U.S. state and territory. An opportunity zone, as Hardy notes, “is a designation created by tax cuts in the Jobs Act of 2017, allowing for certain investments in lower income areas to have tax advantages similar to 1031.” Hardy also noted that there is considerable diversity in opportunity zones as they are not all in low-income communities.
Johnson pointed out that one of the key values of opportunity zones is that they bring new investors to the table. Additionally, Johnson notes that a major client benefit is that opportunity zones can be used to prevent taxes from being taken from capital gains until a later date.
Considering the diversity of opportunity zones (40% are urban, 30% are suburban and 40% are in rural areas), the odds are excellent that you can find the right fit for your clients. For business owners looking for an innovative way to address capital gains taxes, opportunity zones offer up a unique option. In our next article, we’ll explore more on how opportunity zones can provide your clients with a range of new options.