House bill would expand the timeline to invest in Opportunity Zone funds
By Clint Edgington, CFA
Legislation that was introduced in the U.S. House of Representatives this month would extend the deadline for taxpayers to defer and invest their capital gains into an Opportunity Zone Fund from Dec. 31, 2026 to Dec. 31, 2028.
While this Opportunity Zones legislation will allow capital gains realized after 2026 to become eligible, unlike recent extensions, it does not impact the timing of eligibility for capital gains realized before 2026.
What it Means for Funds & Investors
Nest Opportunity Fund supports this legislation. Since the first capital gains started flowing into Opportunity Funds in 2019, the benefits of those investments are only now starting to make in impact.
As we know too well, there is a significant capital and operational commitment required to start a fund. Allowing additional time to raise capital will help incentivize the creation of more funds and give all funds a greater chance to be more successful. More funds with more capital to invest will further improve the distressed areas the funds are intended to help.
Real Estate Funds
The lower-income communities seeing the benefits of the investments in their area are from funds with relatively shorter duration projects, such as Nest. Funds working on larger projects have yet to have much come online.
These funds will be the engine of employment growth. However, the Opportunity Zone regulations are more difficult for the funds to implement, and it’s taking longer for them to wrap their arms around it.
Does Opportunity Zone Investing Make Sense for You?
To find out more about whether investing in an Opportunity Zone fund could benefit you, request your customized calculation here. Or reach out to us today to learn more about Nest Opportunity Fund!
Clint Edgington is the Co-Founder and Principal of Nest Opportunity Fund. The Nest Opportunity Fund invests in smaller real estate projects requiring heavy rehabilitation in Columbus, OH and Lexington, KY. Clint and his family have owned and managed single and multifamily real estate since 2003. Clint is recognized as an expert in the practicalities of Opportunity Zone investing and structures and, as such, has been interviewed, spoken in or been published with the Alternative Direct Investment Securities Association (ADISA), Real Assets Advisor magazine, Opportunity Zone Expo and Columbus Business First. Clint is the past Chairman of the Columbus CFA Society Private Wealth Committee. Clint is a graduate of Miami University with a Bachelor of Science in economics.