What are Opportunity Zones? Opportunity Zones are a new community development program established by Congress as a part of the Tax Cuts and Jobs Act of 2017, and are designed to encourage long-term private investments in low-income communities. This program provides a federal tax incentive for taxpayers who reinvest unrealized capital gains into “Opportunity Funds,” which are specialized vehicles dedicated to investing in low-income areas called “Opportunity Zones.” The zones themselves are to be comprised of low-income community census tracts and designated by governors in every state. South Carolina designated 25 percent of qualifying census tracts as an Opportunity Zone. Qualifying Zones are based on the 2011-2015 American Community Survey.
Opportunity Zones program offers three tax incentives for investing in low-income communities through a qualified Opportunity Fund:
Temporary Deferral A temporary deferral of inclusion in taxable income for capital gains reinvested into an Opportunity Fund. The deferred gain must be recognized on the earlier of the date on which the opportunity zone investment is disposed of or December 31, 2026
Step-Up In Basis
A step-up in basis for capital gains reinvested in an Opportunity Fund. The basis is increased by 10% if the investment in the Opportunity Fund is held by the taxpayer for at least 5 years and by an additional 5% if held for at least 7 years, thereby excluding up to 15% of the original gain from taxation.
A permanent exclusion from taxable income of capital gains from the sale or exchange of an investment in an Opportunity Fund if the investment is held for at least 10 years. This exclusion only applies to gains accrued after an investment in an Opportunity Fund.
To see specific opp.zones please visit: http://scopportunityzone.com/#map
SC Opportunity Zones By The Numbers
Total Tracts in SC
Number of tracts approved that are within a five mile radius of the boundary of a Census Designated Place with a 2015 population of greater than or equal to 5,000 persons
Maximum number of SC tracts approved
Of the 135 tracts, number of eligible Contiguous Tracts approved
Low-income Community tracts approved
Eligible, Low-Income Community Tracts
25% of 538
South Carolina was allowed to select
Number of tracts approved that have their centroid within the boundary of a Census Designated Place greater than or equal to 5,000 persons
Number of tracts approved that are in a Metropolitan Area as Designated by the Office of Management and Budget in their 2017 update
Focus Areas •
Promoting economic vitality parts of the state that have not shared in the general prosperity over the past few years
Funding the development of workforce and affordable housing in areas with escalating prices and inventory shortages
Funding new infrastructure to support population and economic growth
Investing in startup businesses who have potential for rapid increases in scale
Upgrading the capability of existing underutilized assets through capital improvement investments
What are the incentives that encourage long-term investment in low-income communities? The Opportunity Zones program offers investors the following incentives for putting their capital to work in low-income communities: •
Investors can roll existing capital gains into Opportunity Funds with no up-front tax bill
A 5 year holding increases the rolled-over capital gains basis by 10%
A 7 year holding increases the rolled-over capital gain investment basis 5% for a total of 15%
Investors can defer their original tax bill until December 31, 2026 at the latest, or until they sell their Opportunity Fund investments, if earlier
Opportunity fund investments held in the fund for at least 10 years are not taxed for capital gains
Read the recently released Proposed Opportunity Zones Regulations to learn the parameters of the program, including what gains qualify for deferral, which taxpayers and investments are eligible and other guidance
Opportunity Zones Program Intent •
The program provides incentives to investors to invest in new businesses and development in particular geographies
There is no public money as part of this program
The incentive is market based: investments must provide an attractive return on investment in order to attract investors
The program is scalable and flexible
(Although rules are still being written) We do not expect there to be investment minimums or maximums required
Investors can invest in new businesses, new real estate, or substantial redevelopment of real estate (more than 100% of the acquisition cost spent on redevelopment)
Investors can NOT invest in so called sin businesses, defined as: golf courses, country clubs, massage parlors, hot tub facilities, tanning facilities, racetracks or gambling venues, or stores where the principal business is sale of alcoholic beverages for consumption off premises
Deeply Rooted The Lachicotte (pronounced “LASH-cot”) surname is deeply rooted in Pawleys Island. It harks at least to the early 1700s when rice cultivation was central to the family’s success. Fast forward to the 1930s when Arthur Herbert Lachicotte – known simply as “Doc” Lachicotte in these parts – took his rightful place in the region’s business community, He established the famous Pawleys Island Hammock Company and was involved in launching dozens of thriving real estate communities, retail establishments and golf courses all along the Grand Strand. In 1991, he founded the eponymously named real estate venture, The Lachicotte Company. Today, that company remains as well acquainted as ever with the region’s history and beauty, and every agent and staff member takes satisfaction in delivering their acquired knowledge to the clients they serve. Of central importance is that a new crop of community leaders – four seasoned siblings of a local family as respected as the Lachicottes – have taken the reins, and The Lachicotte Company is poised to reach new heights. Patriarch of the new owners was Charles F. Cooper, a great friend and business collaborator of Doc’s. Before his untimely passing in 2001, he was a formidable business force in his own right. Together, their joint accomplishments improved the community in countless ways. Described by one contemporary as “a gentle man of great integrity,” Cooper was a pharmacist by trade. He established several pharmacies in SC and beyond, including the one at Georgetown Hospital. Ultimately, his vision and drive led him into developing and finance when he began building nursing homes, hospices and other health care facilities. He loved all of it, and many awards, board positions and other recognitions gave evidence to the range of his professional passions. And so, as was always intended, an indisputable sense of family and community will continue to define Lachicotte’s company culture. The company Doc Lachicotte built is now in the hands of a new generation who vow to honor the company’s beginnings while keeping a firm eye on the future. Strict adherence to the principles of hard work, integrity and treating both staff members and clients as family is a cornerstone that will serve them well. It always has.
Local Experts NAI Lachicotte Expertise Let our experts at NAI Lachicotte guide you through the process of maximizing the potential of Opportunity Zones. Our team has the experience and knowledge to partner with you and help shape the future of our area through Opportunity Zones
Charles Cooper, Senior Advisor 843.240.2912 ChuckC@nai-lachicotte.com
Chip Abernethy, Senior Advisor 843.241.2654 ChipA@nai-lachicotte.com
Max Jones, Sales & Leasing 843.251.4053 MaxJ@nai-lachicotte.com
Scope of Service Experience Licensed Healthcare Administrator, Licensed Realtor, Founder of Vintage Estates Realty, Advisor to U.S. Senator Lindsey Graham and currently Principal of the Lachicotte Company.
Scope of Service Experience Chip is highly involved in all areas of commercial brokerage including leasing management, sales, listings for industrial, retail, restaurant, office, medical office and land development.
Background & Experience Max Jones is a life-long resident of the Grand Strand and has managed commercial properties since 2008. He specializes in many aspects of commercial real estate and has experience in tenant landlord representation, medical, retail and industrial properties. His extensive knowledge of the area is a tremendous asset to his clients.
Background & Experience Chuckâ€™s focus in real estate is broad and he specializes in health care income properties, commercials sales & leasing and residential properties. He is on the Board of Directors for Horry Georgetown Technical College and Tidelands Hospital Foundation Board. Chuck has been among the Top Producers in Real Estate with sales in Commercial and Residential listings along the Grand Strand for the past 10 years.
Background & Experience Chip has been a licensed Realtor since 2001, starting from new development sales to developing raw land into residential communities. His strong expertise in both commercial and development properties, including 1031 exchanges, displays his diversity of skills in the real estate market.
Education He is a graduate of the University of South Carolina with a Bachelorâ€™s degree in Retail Management. He earned the MICP designation in 2017. He is a member of the Murrells Inlet Rotary Club and a member of Belin United Methodist Church.
NAI Lachicotte - Global Strength Built on Local Leadership
10554 Ocean Hwy., Pawleys Island, SC 29585 843.979.6754 â€˘ nai-lachicotte.com
Broker-in-Charge: Kathy Besse
Source Of Information: Scopportunityzone.com