PHT will make a strategic investment in a QOZ located in Salinas, California through the acquisition and redevelopment of our flagship 28-acre Pre-Cooling and Cold Storage campus.
We aim to make an economic impact by providing long-term, sustainable growth to the City of Salinas, while still delivering competitive returns to investors and stakeholders.
Why invest in Opportunity Funds?
Investors can receive the following MAJOR BENEFITS by rolling their Capital Gains into a QOF within 180 days.
Why Invest in Opportunity Funds
Opportunity Zones Initiative
What are Qualified Opportunity Zones
What are Qualified Opportunity Funds
Taking a Deeper Look
QOZ External Link Resources
Stay Informed
Opportunity Zones Initiative
The Hidden Gem in the 2017 Tax Cuts and Jobs Act (TCJA).
The Opportunity Zones Initiative was established by Congress in the Tax Cuts and Jobs Act (TCJA) in December 2017 as an innovative approach to spurring long-term private sector investments in low-income rural and urban communities nationwide. Suddenly, our nation has a brand-new path to bolstering and revitalizing distressed businesses and communities in approximately 8,800 approved areas known as Qualified Opportunity Zones (QOZs).
what are
Qualified
Opportunity Zones
Qualified Opportunity Zones (QOZs) are census tracts composed of economically distressed communities in the US that qualify for the Opportunity Zones Initiative, according to criteria outlined in 2017’s Tax Cuts and Jobs Act (TCJA).
On June 14, 2018, the U.S. Treasury and IRS finalized certification of the opportunity zones.
In total, 8,762 census tracts were certified as qualified opportunity zones. These zones are located in all 50 states, the District of Columbia, and all five inhabited overseas territories.
In December 2018, Puerto Rico was granted two additional opportunity zones, bringing the total to 8,764. View Opportunity Zone Map here.
Nearly 35 million Americans live in these zones, per 2015 American Community Survey data.
The average poverty rate in the opportunity zones is 32 percent, compared to 17 percent for the average census tract.
The designation of the QOZs will remain through December 31, 2028.
QOZ Property includes the following:
QOZ Business Property
Any tangible property—such as real estate and equipment—that must meet four criteria:
1. It must be used in the trade or business of a QOF.
2. It must be acquired by purchase after December 31, 2017.
3. It must either be originally used by the QOF in the QOZ or substantially improved by the QOF.
4. During substantially all of the time it is held by the QOF or the QOZB.
QOZ Stock
QOZ Stock – any stock in a domestic corporation, as long as it was acquired after December 31, 2017 at its original issue—directly or through an underwriter—from the corporation solely in exchange for cash. The corporation must specifically be an existing or new QOZ Business (QOZB) used solely for purposes directly associated with the approved area.
QOZ Partnership Interest
any capital or profits interest in a domestic exchange if such interest was acquired after December 31, 2017 solely in exchange for cash. At the time such interest was acquired, the QOZPI had to be a QOZ Business (QOZB) used specifically for purposes directly associated with the approved area.
QOZ Map
Opportunity Zones
Qualified Census Tract:
QCT Definition
A Qualified Census Tract (QCT) is any census tract (or equivalent geographic area defined by the Census Bureau) in which at least 50% of households have an income less than 60% of the Area Median Gross Income (AMGI).
what are
Qualified
Opportunity Funds
A Qualified Opportunity Fund (QOF) is a new investment vehicle created as part of the Tax Cuts and Jobs Act (TCJA) of 2017 to incentivize investment in targeted communities called Qualified Opportunity Zones (QOZs).
Thus, the opportunity zone legislation does not seek merely to increase investments in low-income communities; its goal is to reallocate capital to these investments from appreciated investments outside the zone.
How are QOZ communities impacted by your investment in QOFs?
As an investor of a QOF, your investment goes directly into the QOZ communities, improving businesses, infrastructure, and impacting lives. If businesses in QOZs thrive, the communities will have more jobs and better salaries to offer. More people will want to relocate to these areas, which will increase real estate values and breathe new life into local shops and stores. When residents and business owners are doing well, they spend more money on beautifying their homes, storefronts, public buildings, streets, parks, and monuments. Their infrastructure will improve, crime will decrease, and better health care will be available for residents. Spread out over many communities, QOFs can help our nation flourish as a whole.
Why invest in Opportunity Funds?
Investors can receive the following MAJOR BENEFITS by rolling their Capital Gains into a QOF within 180 days.
Defer
Capital Gains
Investors can defer recognition of the capital gain invested into a QOF until December 31, 2026 and postpone paying the federal tax obligation until the tax return due date in 2027
Eliminate
Additional Capital Gain Taxes
If the investor holds the QOF investment for 10 years, any additional gain (in excess of the deferred gain recognized in 2026) on the sale of such QOF investment is 100% tax-free at the federal level if sold prior to 2048
receive
Income Distributions
Investors might also receive income distributions from the QOF’s earnings
now,
Let’s Take A Deeper Look…
tax benefits
Any investor that recognizes an eligible capital gain for US federal income tax purposes may take advantage of the tax benefits of investing in a QOF, including individuals, corporations (which includes real estate investment trusts [REITs] and regulated investment companies), and partnerships.
investment time frame
Investors must invest in a QOF within 180 days of recognizing the eligible capital gain. The alternative option is to pay federal taxes.
QOF process
QOFs have up to 31 months to invest in a QOZ from the date funds are received from investors.
Defer capital gain
All or any portion of a capital gain may be deferred through an investment in a QOF.
QOF assets
A QOF must hold at least 90 percent of its assets in qualified opportunity zone property.
QOZ property
70 percent of the tangible property “owned or leased” by a business must be qualified opportunity zone property for a business to be considered a QOZ Business.
10 year hold
If an investor holds the QOF interest for at least 10 years, all federal capital gains in excess of the amount recognized on December 31, 2026 will be 100% tax free.
deferring capital gain time frame
For federal income tax purposes, investors can defer recognition of the invested capital gain in the QOF until December 31, 2026, or until the sale of their QOF interest, whichever occurs first.
QOF investment benefits
An investor can defer tax payments on capital gains that are invested in a QOF until the earlier of the sale of the new investment, or December 31, 2026.
liquidation time frame
The QOF, including all assets in the QOF, must be liquidated by December 31, 2047.
Who can invest in a QOZ Fund?
Whether you’re selling stock, real estate, or a business, investors with capital gains can reinvest them into a Qualified Opportunity Fund (QOF), allowing them to defer taxes until 2026, receive a permanent federal tax exclusion on any appreciation from the QOF if held for 10 years, and receive income distributions from the QOF’s earnings.
Click here for more information on Qualified Opportunity Funds.
External Link Resources
Opportunity Zones Map
PHT Opportunity Fund
Distressed Communities Index
Key Insights from Ten Years of Change.
A decade ago, the financial crisis impacted our economy, our politics, and our society in ways few could have expected. Looking back now, we wondered: How did the Great Recession and subsequent recovery affect the health and trajectories of American communities? And how have the rewards of a long national expansion been distributed in local terms across different places and populations?
To find out, EIG used its Distressed Communities Index (DCI) to compare two distinct time periods: 2007-2011 and 2012-2016. The DCI combines seven complementary metrics into a single measure of economic well-being, resulting in a clear snapshot of the economic and social state of the U.S. zip codes, counties, cities, and congressional districts. Places are sorted into quintiles based on their performance on the index: Prosperous, comfortable, mid-tier, at risk, and distressed.
What we found amounts to a “Great Reshuffling” – a sorting of human capital, job creation, and business formation that has had vast implications for Americans and their communities. In the years following the recession, top-tier places have thrived, seeing meteoric growth in jobs, businesses, and population. Meanwhile, the number of people living in America’s most distressed zip codes is shrinking as the nature of distress becomes more rural. But the gaps in well-being between prosperous areas and the rest have grown wider, and national rates of growth have become more distant from the experience of the median community.
Opportunity Zones Facts & Figures
Economic Innovation Group
OPPORTUNITY ZONES RESOURCES
CDFI Fund
Opportunity Zones Frequently Asked Questions
US Internal Revenue Service
IRS and Treasury finalize Opportunity Zone guidance
US Internal Revenue Service