A little known component of the sweeping changes brought on by Trump's US tax bill in 2017, has created massive opportunity for investors in the United States. A fledgling strategy, I think that Canada could benefit from watching closely to see how this all develops.

 

Opportunity zones are designated by the Federal Government, and are generally low income areas that meet certain qualification guidelines. The high priority zones have an average poverty rate of nearly 31 percent, and an average median family income of only 59 percent of its area median, compared to the 80 percent eligibility threshold.

 

DETAILS

The new program lets investors defer and reduce taxes on realized capital gains by reinvesting them in areas designated as “opportunity zones.” And potentially even more significant, taxes can be avoided altogether on gains accrued on the new investments if they’re held for the long term.

 

Why should we know this?

General knowledge is never a bad thing, and more importantly, we have a federal election coming up here in Canada in the coming months. To the extent that you engage in this sort of behavior, speak with your local politician to get their perspective. I would be ABSOLUTELY SHOCKED if they (any politician) had any clue, but that is a story and opinion for another day.

 

I would encourage you to read more in this New York Times Article, and pass this link along to your US friends and family!