I was at dinner with my friend Stephen a month or so ago and he was bending my ear about a provision in last year’s tax bill that provides very significant tax incentives to invest in businesses or real estate in certain locations around the US that have been underinvested in.
It all sounded way to good to be true and I kind of ignored him. This sort of thing has been part of so many economic development plans over the years that it sounded like more of the same to me.
We had dinner again last week and he started in again, but this time we were with some other friends and they chimed in.
It turns out the tax incentives are as generous as my friend said and what seemed to me to be too good to be true is in fact true.
These locations are called Opportunity Zones and here is a map that shows where they are located. I bet there are some near you. There are a ton in NYC.
Forbes has a long piece on how these rules came to be and how they work.
I have never been a fan of letting taxes drive my investing and I don’t plan to change that but there are plenty of good investments that can be made in these zones and these new rules seem like they are going to catalyze them.