← Opportunity Zones Podcast
Loading summary
Transcript1 lines
- [00:00]
A
Welcome everybody to today's Oz 2.0 super webinar. I'm Jimmy Atkinson, founder of OpportunityZones.com and author of the brand new book the Opportunity Zones Playbook, now available at Amazon, Barnes and Noble and wherever books are sold. You're listening to the Opportunity Zones podcast, the number one show on opportunity zone investing, brought to you by opportunityzones.com and now, here's your host, Jimmy Atkinson. This is my Oz 2.0 super webinar where I'm going to tell you basically everything I know about Oz 2.0 and and I'm coming to you at a really opportune time. July 7, 2026 is today's date and it was just last week on July 1 that the determination period or the nomination window has officially opened up. The 90 to 120 day period over which the governors of every state, the governors of all the overseas inhabited territories, and the mayor of Washington, D.C. will submit their official nomination list of census tracts to the Treasury Department before we dive in. Legal Disclaimer this is not meant to be investment advice, tax advice, or investment advice, or legal advice. So please consult with a professional before making any investment decisions. Don't rely on this. This is merely meant to be information, general information. Right? So what we'll cover today, this is meant to be a long webinar. By the way, I blocked off 90 minutes for this. I'm not sure how long we're going to go for. We'll try to save some time for questions at the end as well. I'll go for at least an hour though. I'll set the stage, tell you about why Oz 2.0 matters right now. I'll tell you a little bit about what it is. If you're new here, maybe you just found out about ozs a few days ago or a week ago, or a couple weeks ago. You haven't been watching my podcast, you haven't been reading all my guides over the last several years. I'll get you up to speed. We'll talk about the new eligible universe, where the OZ 2.0 tracts are going to be. We'll talk about the nomination process, the transition from Oz 1 to Oz 2. We'll cover kind of a technical, nuanced aspect of the nomination process which deals with off list tracked nominations. If you don't know what that means, don't worry, I'll get you up to speed on that in a moment and then the last few slides will we'll talk about. Okay, what does all this mean for you? What are some strategic implications. What are some key takeaways for you? So first, let's set the stage now what the Aussie 2.0 rules mean and why they matter now. So first of all, we have to zoom out, get way back to what the heck are Opportunity Zones anyway? So Opportunity Zones were passed as part of the Tax Cuts and Jobs act back in 2017. The idea of Opportunity Zones was first introduced into the House and Senate back in 2015 when Obama was still in the White House. Senator Cory Booker. Senator Cory Booker, a Democrat from New Jersey, and Senator Tim Scott, a Republican from South Carolina and the author of the Forward to my to my new book as well. They were the two original co sponsors on the Senate side that introduced Opportunity Zone language into Congress back in 2015. A couple years later, it got picked up and packaged into the Tax Cuts and Jobs Act, Trump's sweeping tax reform bill during his first term. And Opportunity Zones became officially a thing part of the tax law in late December of 2017. The problem with the original Opportunity Zones though was, well, there were a few problems, but the main problem was it was always meant to be a temporary program. It was going to expire at the end of 2026. So as the years ticked by and we got closer and closer to the end of 2026, as we continue to get closer to 2026, we were always facing a cliff, an end date, a sunset date. And so a plan was worked up to renew not just Opportunity Zones but a large amount of the Tax Cuts and Jobs Act. And that happened officially on July 4th of 2025, just one year ago when the One Big Beautiful Bill act was passed into law and enacted by President Trump during his second term. So now we have a new framework. The One Big Beautiful Bill act says that Opportunity Zones are no longer temporary, they are permanent. Going to get new Opportunity zones designated every 10 years. Every year that ends in six will be a process that gets underway in which governors nominate low income census tracts to the Treasury Department to be designated as Opportunity Zones. That Opportunity Zones that'll go into effect on years ending in seven. So that we're going through that right now, 2026, second half of 2026. Starting a week ago on July 1st, the nomination process officially opened up. Governors from every state can submit their list of nominated tracts to the Treasury Department for opportunities on designation. And those designations will go into effect on January 1, 2027 for a 10 year period. Now the new rule book, new rule book that's going to govern a lot of this is IRS Revenue Procedure 2026 14. I've covered that in our OZ Insiders masterclasses and on my podcast. Previously done a deep dive into that Rev proc. But essentially it Governs How Oz 2.0 zones are nominated and designated. Put some rules around the legislation and then IRS Notice 2026 Dash4.0, which just came out I believe a week or two ago, very recently discusses the transition rules bridging Oz 1.0 to Oz 2.0. This is actually a pretty unique period in the history of Opportunity Zones in that we're we have oz 1.0 still in effect through the end of this year and actually the zones themselves are still good through the end of 2028. Kind of a quirk of how the Tax Cuts and Jobs act was passed and how the first set of zones was originally designated. So we'll have this two year overlap with the OZ 1.0 tracks are still in effect through the end of 2028. Yet the OZ 2.0 tracks go into effect before then. They go into effect two years before then on January 1, 2027. That'll be the only time in the history of Opportunity Zones that that will happen going forward. Opportunity Zones will cut off at the end of a year that ends in six and the new ones will begin the very next day that the very next moment in time, January 1st of years that end in 7. So when we do this again in 2036, those zones will go into effect on January 1st, 2037 and the old zones will expire the night before on December 31, 2036. We won't really have this problem going forward. But because this was the first time we're doing this and the Tax Cuts and Jobs act had kind of an arbitrary cutoff point at 2028. We've got this weird two year overlap. So but essentially what's going to happen is we're going to get the map reset nationally and I'm going to show you the brand new Opportunity Zone mapping tool that we've just released on opportunityzones.com over the last couple of days here. I haven't even promoted it yet, so this will be the first time I'm really talking about it on a webinar like this or on my podcast. We put some really cool bells and whistles on it that shows you exactly how we're expecting the map will reset. And I've talked about permanent versus periodic and then what's settled versus what's left open. So the guidance that the IRS and Treasury have issued confirms the eligible list of tracts, the definition of opportunity zones, the nomination window or the determination period as it's referred to in the statute, and the tool that they are using@oddortunityzones.gov not opportunityzones.com Opportunityzones.gov is where they are receiving nominations from the states. But each governor's selection process is going to vary and the off list pathway remains very state driven. We're going to talk about what off list nominations means and we'll also go through state by state and there's 56 of them. If you include the five overseas territories and the District of Columbia, I'll show you where each state is in the process. All right. You know, one thing I did want to do actually, I guess I'll save that for a little bit later, but I did want just want to say that we are recording this webinar today. You will get a copy of the recording later this week and I am going to make this presentation deck available for download as well. In fact, if I can figure it out, I'll make the presentation deck available for download within this Zoom webinar shortly. So for those who may be new to Opportunity zones, maybe you're not even Quite sure what Oz 2.0 is, how it differs from Oz 1.0, what are the tax benefits? And just to zoom way out, essentially, Opportunity zones provide a tax break to wealthy investors with capital gains as long as they roll their capital gains into low income communities and hold those dollars in low income communities for a period of at least 10 years. All right, so that's, that's, that's OZS in a nutshell. That's the 10 second elevator pitch on what OZS are. It's a tax incentive to in, in incentivize private capital to flow into low income areas that might not other res otherwise receive private investment dollars. And Oz 2.0 takes effect January 1, 2027 and it resets what the tax incentive looks like for an investor with gains as long as a gain, a capital gain is rolled into a qualified opportunity fund within 180 days and that investment into the qualified opportunity fund takes place on or after January 1, 2027. Then there's three big incentives for investors. One is a five year deferral period. So if you roll a gain into a qualified opportunity fund on January 4, 2027, which I believe is the first business day of 2027, instead of recognizing that gain on the transaction date, you get to defer recognition of that gain for five years until January 4, 2032. And then the tax bill would be due the following April 15, April 15, 2033. Number two is there's a 10% basis step up available to investors who park their capital gains dollars into a qualified opportunity fund. Essentially what that does is according to the statute, it reduces the amount of gain that you recognize by 10%. Now, if you're in a rural fund, if you invest in a qualified rural opportunity fund that deploys its fund dollars into rural opportunity zone projects, then that basis step up becomes 30%. And then benefit number three, the same 10 year benefits apply as did in the previous program. If you hold for at least 10 years once you exit, you are not taxed on the appreciation of the opportunity zone investment, nor is there any depreciation recapture. So this is covered in depth in chapters two and three of the book that I hope all of you should have or should have shortly in the foundations section. And let me read for you exactly what the those chapters are. Here we go. Chapter two, the world of Oz 2.0. And then chapter three is Oz tax advantage and Timing Rules. Somebody thought I should do a book event, by the way, where I actually opened up a particular page and read a passage from the novel as though it were some sort of read a passage from the book as though it was some sort of mystery novel or romance novel or something like that. So if you're interested in something like that, let me know. I know some of you are probably coming to my dinner for our OZ insiders members in Los Angeles later this week. So if you're coming to that, give me a shout in the chat. Would love to hear from you. So let's move on to the new eligible universe. And then a little bit later in the presentation I'm going to go through an example of what those three benefits look like with real dollar amounts. But just sit tight for a second here. So we'll talk about the new low income community definition. First, Oz 1.0 was a little bit more generous with how they defined low income community. A low income community had to meet certain criteria and that criteria was that it that it that the census tracts median family income had to be 80% or less than the surrounding areas or statewide median family income 80% of the surrounding areas median family income or statewide median family income depending on whether it was located within a metropolitan statistical area or not. That has since been Revised down to 70%. So now the the census tract, the pool of eligible census tracts for nominating as qualified opportunity zones has shrunk because they have tightened up the definition of low income community where fewer communities will qualify, they have to be more impoverished. They have to have 70% or less of the median family income of the surrounding MSA or statewide median. So essentially means, like I mentioned a moment ago, they're more impoverished. And then the poverty. There's a, there's another way to qualify is if the poverty rate of the census tract is 20% or greater. And that was the same way that it was during the Oz 1.0 designation round, except for now. There's also a cap if the, if the tracked wide median family income sits at or above 125% of the area or statewide median, then it's disqualified from being able to qualify under the 20% poverty rate cap. Oftentimes we see a high poverty rate and also a very high median family income in areas in census tracts where there's oftentimes, oftentimes census tracts near college campuses where you might have a pocket of student housing where those students are technically below the poverty rate if they don't have any income or if they have very little income from working just a part time job. But then there may be a more affluent area surrounding that student housing to really bring up the MFI. You could have an MFI median family income that is 125 or 150% of the MSA's median family income. And yet the poverty rate of the tract is 25 or 30% just because there's so, so many students living there with zero income. So that's, that's something that they have put a guardrail around to, to prevent those type of tracts from being designated as, as opportunity zones. Under Uzi 2.0, they've also updated the data set that they use to determine all of these numbers. We're using the most recent data available. It's fixed to the 2020 through 2024American Community Survey five year estimates. And it does lock the map to that data vintage for the full cycle. So they're not continually updating the data every year to determine which tracts are eligible or not. It's a snapshot in time. That snapshot's been taken. The eligibility universe has already been determined and now we're undergoing the process where the governors of each state are picking from that eligible universe of tracts and determining, okay, which tracts do we want to see designated as opportunity zones? Typically, and I'll get more into this in a moment. Typically, each state is allowed to nominate only 25% of their low income tracts as opportunity zones. Let's See, there's no more non low income continuous tract provision that was eliminated. And then roughly 60% of today's land that is designated as opportunity zones. Actually that's not true. It's higher than that. It's, it's 60% of today's Oz 1.0 tracts are fully eligible for redesignation under the new definition. I forget what the land percentage is. It's higher than that though. So overall as we head into OZ 2.0 we see a little more than 25,000 eligible tracts and over 8,000 of them are rural. So about, what is that about? About a third of them are rural now. I don't know how it's going to shake out in the end. We're going to get about 6,500 tracts designated as opportunity zones. I don't know if 20 something hundred of them are going to be rural or not. It kind of depends. Each state has leeway and in how they allocate their, their opportunity zone nominations. But there is a more deliberate rural emphasis in the new OBBBA framework. Rural investors do get more incentives. So we'll see which states take advantage of that. Like I mentioned, it is a smaller pool than in 2018. There were nearly 32,000 tracts during that 2018 designating round. The pool is shrunk to a little over 25,000 this time. So 20% fewer tracts roughly. I mentioned the 25% cap. It's gonna result in a smaller map. Overall we've got 8,764 zones that are designated today. The 2020, I'm sorry the 2018 designations in the OZ 2.0 round we're anticipating 6,544 approximately and then that will be locked for a 10 year period. Once those zones are designated and certified by the Treasury Department later this fall, those are the zones for the next 10 years. They'll be locked. So let's talk about the nomination process and we'll see where all 56 jurisdictions stand today. Again, the jurisdictions are all 50 states, the District of Columbia and the five inhabited overseas territories. So first of all, where the heck are we in the process? By the way, before anybody points it out, this timeline is not to scale. There's not an even amount of time between those dots there. But it's merely illustrative to, to show you some of the key dates in the process. So the, the first key date was just last week. July 1, 2026 was when the determination period started. Determination period is the phrase used in the Statute in section 1400 z1 in the 1 big beautiful Bill act, most people just call it the nomination window. It's the window of time in which the states are able to nominate their census tracts to the Treasury Department for consideration. This is the determination period is a 90 day period. But the statute does grant treasury the ability to extend the determination period for any particular state by a period of up to 30 days. So it's really if a state, let's say the state of Texas, requests a 30 day extension, the Treasury Department will grant it. And then it's 120 day period. Each state has to request it. Each state's kind of different. Some states may request it, some states may not. But without the extension the window closes on September 28, 2026. And if some states do request a 30 day extension, I have no doubt that a lot of them will that would take the determination period or the nomination window out through October 28, that additional 30 days. Once the that window closes either on September 28 or October 28, the Treasury Department then enters a consideration period where the treasury considers the nominations before them for each of the 56 jurisdictions. And the consideration period is a 30 day period, but it is also extendable by 30 days. So we're really talking about a 60 day period here. The treasury gives themselves an extension that really carries us. The latest possible date that treasury has to certify all of the census tracts is December 27th of 2026. Likely we'll have some designations officially certified in sooner than that. Possibly as soon as September or October. Certainly late November through, through late December is when we're going to get the bulk of them, I suspect. I do also suspect that states, as they nominate their list of tracts to the Treasury Department, a lot of them may be transparent about what they've done and they may publish those nominations now. To date we haven't had any nominations get published. I'm scouring the Internet, I'm talking with all of my other OZ colleagues. Hey, have you heard any other states, have you heard any states submit their nominations yet? Have they published any lists yet and no, we haven't seen any yet. I thought maybe we'd get some on on July 1, but we haven't. Here we are sitting July 7. We haven't had any yet, but I think we'll probably get some states submit their nominations and publish their lists at some point this month. Other states may drag their feet a little bit and give themselves the full length of time until closer to the end of September or even into October. The zones take effect on January, January 1, 2027. And they're good. They apply for a 10 year period ending December 31, 2036. So we're in the nomination window right now and things are really going to heat up in September, October, November, December when, when the window closes and treasury starts certifying these zones and we'll get a new map taking place on January 1, 2027. So how does this nomination works? Well, first of all, only governors and governor's offices can submit nominations. So the Treasury Department will only receive nominations from the executive branch of the States, the overseas territories, the mayor of Washington D.C. so if you are a local community development entity or intermediary, you need to go to your state. You don't go to the Treasury Department if you're a developer, you go to your county or your city or your state, depending on what the state is. You do not go to the treasury department. There's only 56 offices that are allowed to go straight to the Treasury Department and that's the executive branch of each state. The window, we covered that already. And then, yeah, there's also just one submission channel. All nominations need to be routed through the Treasury's nomination tool@oddortunityzones.gov so that's where you, if you are a state, if you are from a governor's office, you would use that tool@oddortunityzones.gov you should have received information from the Treasury Department by now as well. Otherwise the vast majority of you listening to this and on this webinar and listening to the recording later, you're a developer, you're an investor, you're a sponsor, you're an accountant, you're an attorney, you're advising folks who are stakeholders in opportunity zones. You need to go to your governor's offices to, to plead your case for why your census tract or set of census tracts should be on their list that they send in to the Treasury Department. And then from nomination to designation, governors are able to revise their slates if they submit a slate of tracts and they change their mind. As long as they change their mind before the end of the determination period, before the end of the nomination window, they're welcome to do that. Certification is going to occur, as I mentioned a couple of slides earlier, late November through December of 2026. I hope we get some news, maybe some official designations prior to then. I don't see why we couldn't possibly have. I mean, in theory I think we could have the Treasury Department officially designate some tracts in some states as early as September 28th or 29th, I guess that would be, that would be working really fast for them though. So, but, but maybe we might get some in in October, certainly November. I think we'll, we'll get some in and then it could drag out toward the last week of December. Like I mentioned, the very Last date is December 27th. That's kind of over the holiday period. I don't know if the Treasury Department's going to be working then or. I think they do, actually. I think they will be working then, so. But we'll see how it all plays out. So in a minute we're going to look. Yeah, here it is. We're going to look at the state by state picture. This information I'm sharing with you, by the way, I sourced from Frances Curran MANON @, FBT GIBBONS. And she has done an incredible job of scouring the country looking for information on the nomination process for all 50 states, all five overseas territories, the, and the District of Columbia. And she has her finger on the pulse of what's happening in all 56 of these jurisdictions. And it's constantly changing too. New new states are coming online and closing every day, it seems. Windows are opening, closing and then reopening again, getting extended. So this is the very latest information from Frances. Many thanks to her. As of just before the fourth of July holiday. This, this was her latest compilation as of July 2, 2026. I don't know if anything's taken place or, or change in the last couple of days here, but this is, this is very much as up to date as we can get. So two big headline numbers at the top. We've got 25,000 and change eligible census tracts. And those are going to get whittled down to 6,544 anticipated oz. 2.0 designations. We might get a few more than that possibly. I'll talk about that a little bit more in a minute, but that's pretty much the number we're gonna get. Where do the 56 jurisdictions stand today? 28 of them have already closed their nomination period. So if you're looking to nominate a tract in the state of Texas, for instance, Texas closed their nomination period, I think a week or two ago. So now is it officially closed? I don't know if you've got Governor Abbott's ear or the ear of somebody in his, in his office, you know, they, they don't need to submit their nominations until at the latest October 28, 2026. Now Texas has to said, by the way, that they're going to submit their Nominations on or before August 3, 2026. I'm in Texas, so that's why I'm kind of using them as an example. So. So more than half of the jurisdictions, they've already closed their nomination window. Although I don't think anybody has submitted a final list of nominations to the Treasury Department just yet. And as I mentioned before, even after you submit your nominations, treasury won't consider them final until the end of that nomination period. Until the end of the day on September 28th or October 28th if you request that 30 day extension. We've got four of them are in progress. Eight of them have their window open. So basically 12 of them right now are actively receiving nominations from communities and their juris and their, and their municipalities all over the, all over the state. Sixteen jurisdictions have not said anything about Oz 2.0 yet. You load up their webpage, there's nothing about opportunity zones or to the extent that there is, it's all about Oz1. It's all outdated information. So let's go through each one of these one at a time here. Some signals worth watching. I wanted to catch up on this with you. So we see a pretty huge reduction in the amount of OZ 2.0 designations compared to the OZ 1.0 map that we see today. Today we see 8,764 census tracts that are designated as opportunity zones. Compare that to 6544. That is a 25% reduction in the opportunity zone map from the 1.0 to the 2.0 program. That's derived from the fact that the pool of tracts is lower, which is derived from the change in the low income community definition. It's a tighter definition now, so it's going to be a more focused map than it was eight years ago. So the vast majority of states are losing significant numbers of opportunity zones. There are four jurisdictions that actually gain zones though. Louisiana is going to pick up five, the USVI is going to pick up four, New Mexico picks up two and Mississippi picks up one. That's based on the fact that they've had population growth or their, their first set of tracks were, were quite impoverished and their second set of tracks are also still impoverished. Either poverty rate's gone up, MFI has dropped down, or more likely it has been population that's grown a little bit of combination of all three of those factors. And then Puerto Rico experiences the steepest reduction. They're going to lose 79% of their opportunity zones. They had 863 and they're moving to 178. The reason for that is first time around, Congress wrote a special rule just for Puerto Rico to nominate not just 25% of their eligible tracks as opportunity zones. They were automatically granted. 100% of their low income tracts were designated as opportunity zones. Like I did mention before, the OZ 1.0 tracts expire at the end of 2028. More on what that means in a minute. Puerto Rico's tracts actually are set to expire at the end of 27, though one year early due to a technicality I won't get into now, but I've covered it on the podcast if you care to go down that rabbit hole. I also wrote an article for Tax Notes on that as well if you want to search for that. Let's see. Think that covers everything that we need to on this slide. The next four slides we'll go through each jurisdiction one at a time. I won't spend long on each one and I won't actually go through each one one at a time. But you can kind of take a glance at this and see which state is doing what. I do see that a few questions have come in. A few questions and comments. I'm going to hold those toward the end of today's session. I'll address as many of those as I can. If you do have any questions that you have in mind about opportunity zones, about the book, about today's presentation in particular, just go ahead and fire up the Zoom chat. Just type your question into the chat. We'll get to as many of those as we can toward the end of the session today. So let's just pick on California here. My my home state, state of my birth. I live in Texas now, but I'm from California. So California, their window is currently open, which is great. They're one of the 12 states with an open window or a window that's in progress. Rolling window. Their community deadline is currently set to July 25th. That could change. Some of these states have changed their deadlines when they'll announce a deadline and then they'll extend it. But currently, if you are an OZ stakeholder in California and you want your tract on the list of the states, if you want your tract to be nominated by the state, now is your time for the next two weeks. You have until July 25th to submit your nomination to the governor and you can do so by heading to the Go Biz website, which is stands for the Governor's Office of Business, I believe, and they'll have further instructions on that website there under Oz 1.0. California had 879 census tracts designated as Ozzies. They are anticipated to have 618 oz. 2.0 census tracts. So that's, that's a glance at how that works. Connecticut, you go to their oz website@connecticut.gov or whatever their website is. There's nothing, there's no information there. They haven't issued any guidance on what's going on. And then a state like Florida, they closed their window over a month ago. They were accepting nominations through Florida Commerce, and that period's closed and they're going to submit there. I think right now the governor's office is considering all of the hundreds and hundreds of nominations that have come in. And they have to, they have to pick 340 to submit to the Treasury Department. So that's a quick look at, at how this table works. I'll go to the next group of states here. We'll go Idaho through Missouri. You can take a glance at that. Nothing from Iowa. Nothing from Michigan. Various community deadlines in Louisiana, but the window has largely closed there. Through the Louisiana Economic Development Department. A lot of these windows have closed already now. Does that mean that it's closed for good? I don't know. Illinois closed their window April 24, which seems really early to close their window. I wonder if you call the governor's office in Illinois right now, would they still hear your case? I don't know. Maybe some of these states would. Maybe. Maybe it's a firm deadline. It's going to vary state by state. Maryland has their window open, but pretty lengthy period of time too. Their windows open through August 7th. They're taking their time. They only have 113 tracts to, to submit. So it's not like they're receiving thousands like some states are. Let's go to the next page here. A lot of these haven't issued any public guidance yet. Nothing from Montana, nothing from Nevada, nothing from New Hampshire, nothing from New Jersey, nothing from New York State, nothing from North Dakota, so on and so forth. Ohio's window is currently open. It is closing soon, though. So if you're in Ohio, you've got three more days to submit your nominations, your case for your census tract to be included on the state of Ohio's list of nominations to the Treasury Department. Oregon closed theirs. When was that? Six weeks ago. So kind of interesting, some people, some of these states closed as early as April. Some of them haven't even started the process yet. Others are closing imminently or within the next couple of weeks. Here. Final, final list of, of states Here, Puerto Rico, this is the first time they have undergone a designation process. The other 55 jurisdictions underwent a designation process in 2018, but Puerto Rico never went through a designation process because they were automatically granted all 800 and change. I think 878 if I remember correct. Oh yeah, it's on there. 863. 863 of their tracts were automatically designated as opportunity zones. That's all of their low income tracks according to the Oz 1.0 definition. But this time around, you know, they've got, I don't know how many tracks they have eligible. Fire that up in a minute though. But they're gonna need to designate a mere 178 of them. So if you divide that by 0.25, that's the number of tracks they have eligible, roughly. So that's what that looks like. Let me talk about Vermont and Wyoming for a minute. I'll pick on a couple more states too. By the way. Vermont hasn't issued any public guidance yet, but Vermont's an interesting case because they only have 24 tracts that are eligible to be nominated as opportunity zones. And the statute actually carves out an exception if you have fewer than. Well, it's two exceptions actually. First of all, if you have fewer than 100 tracts, 25% of 96 is only 24. But the, but this, the Congress wanted every state to have at least 25 census tracts designated as opportunity zones. Kind of like how every state gets two senators even if their population is really small. You get, you always get two senators in, in Oz land, you always get at least 25. At least 25 opportunity zones. But what happens if you have fewer than 25 eligible tracts? Well, that's the case in Vermont and in Wyoming. Vermont only has 24 eligible tracts, so they get to nominate all of them. And wyoming only has 20, so they get to nominate all of them. So really, if you look at, and I will look at this map in a moment here, I'll look at the map of Vermont and we'll look at the map of Wyoming. We'll see which tracts are eligible for nomination. Those basically are the opportunity zones in those two jurisdictions. You do the same thing for some of the overseas territories too. The USVI only has 18, so they're going to get all 18. They have to submit the formal designations, but they will get all 18. The Northern Mariana Islands only has 19. They're going to get all 19. Going backwards again here. Some of you are groaning, oh no, please don't go backwards. I hope I'm kidding. American Samoa gets 16, they're going to get all 16. Guam only has 20, they're going to get all 20. So and then you can see quite a few states do have exactly 25 that they're getting. They had exactly 25 in O1 they are going to have exactly 25 and Oz. Two, Alaska, Delaware, the District of Columbia, Hawaii. That's because they have fewer than 100 eligible tracts. So instead of capping them at 25% they cap them at a quantity of 25 instead. So that's the same as it was in Oz. 1.0. This is the first time where we have states that have fewer than 25 eligible tracts. So we'll take a look at the map in a moment. But yeah, kind of interesting. Vermont hasn't issued guidance yet but they don't really need to do much. They just, they're going to get all 24. Wyoming, they have issued some guidance. They have a nomination process in progress right now. There's no firm community deadline but also, well you only have 20 total tracts available to be designated so there's really not much to do unless they nominate some tracts that are not on the Treasury's official list. So that's one thought coming out of the industry is that what if Wyoming is able to prove that they have five additional tracts that are eligible? So Wyoming might actually have a little bit of leeway there. They're going to get those 20 that are definitely on the Treasury's list. But can they find five more tracts that weren't on the Treasury Department's official list that they can get through? Same with Vermont. Vermont, can you find one more tract that is in fact eligible even though the Treasury Department has deemed it off the list? So let's take a look at the map now this is our brand new map on opportunityzones.com/map. A little bit of instruction on how to use the map. You can scroll down. We've got this brand new shiny map down here and what I'm going to do is I'm going to enter full screen mode to make it really big for you. So what do I want to do here? Well first of all the default view here is this is showing the current opportunity zones in the country. Somebody type in the chat, where do you want me to go? You got a state, you got a city, you got a county, you have a particular address. I'll look up anything you want. First one to get their, their suggestion in, I'll take them up, take you up on it and I'll zoom in there in the meantime. Oh, we got somebody already. Holy smokes. We got a lot of them. Thank you. All right, I think Laurel, Mississippi was the first one. So I type in Laurel, Mississippi. Zoom right in the Laurel, Mississippi there. So there's Laurel, Mississippi. I'll just zoom out just a little bit so we can get a little bit of the surrounding area. Laurel, Mississippi. This looks like a pretty small town. It's a rural town. These are going to be rural eligible tracts here. Again, we're looking just at the oz 1.0 tracts. These are the current tracts in Laurel by the way. You can switch. Actually this is kind of a demo with a new map frankly. So we can switch to Street View which looks a little bit more Google Map esque. You can zoom in, you can see building detail, you can see street names. We also go dark mode. And if you're not sure what this building is, what is this building? We got satellite mode here too. Oh yeah, it's, it's this strip mall. I'm just guessing this is a strip mall. Maybe it's a school. I don't know. You get the idea. Let's go back to Light View though. That's my favorite. And we can kind of click on these two tracts here and we can see a little bit of information on. First of all, we're looking at Track 9505, this one here that I'm hovering over and we've got a few things we can look at here. Again, we're really just looking at the oz 1.0 layer right now. It shows the track number, census tract 9505, the full 11 digit geo ID and then it says what the status is. This is a qualified opportunity zone 2010 boundaries. It is also classified as a rural tract, meaning if you were to do a substantial improvement project in this area right now, you would only need to adhere to 50% substantial improvement, not 100% like you would in a non rural zone. And then going forward, starting January 1st, if a qualified opportunity zone business or project is located in this zone, the dollars that come into that business or project from a qualified rural opportunity fund, those dollars, those investors who put the dollars into the fund would be eligible not just for a 10% basis step up, but a 30% basis step up. So at designation you can see the poverty rate was rather high. 32.6%, median family income in the 30 thousands. The MFI ratio was 75.4% of the statewide MFI at the time of original designation back in 2017. 2018, I should say. Remember back in the day, you could. You. You would clear it if you had 80% or lower or if this was 20% or higher. So it meets both criteria. You got a little bit of population here. And then what I could do, by the way, is I can see well what's going to happen. And that was just one track. There's another tract here to the south also. What's going to happen to these two tracts for OZ 2.0? We got a couple things we can do here. We can go to the fate view. Oz 1 to Oz 2.0. Fate view. Let me check that on. So these are both lighting up fully teal, bright teal, which means they're both fully re eligible for nomination. Again, if I turn the OZ layer off and look at just the Oz 2.0 eligible tracts now. So now we're looking at eligible tracts for OZ 2.0. So now Laurel has a little bit more going for it here. So this, this, this area on the southeast side of town is tract number 9507. This tract that's just kind of a light gray color here. This is not eligible for Oz 2.0 nomination. According to our current 2020 through 2024American Community Survey data. Its poverty rate is not quite high enough. This would need to be 20% in order to qualify under poverty rate. And then its median family income of the tract is 68,000, which compared to the statewide average of 73,000, is 93.2% of that statewide median family income. Again, this number needs to be at or below 70%. So it misses on both of those checks right there. But these two tracts are still eligible for nomination. Let's see, this one to the north meets both criteria. Its percent of area MFI is below 70%. It's at 65.2. The poverty rate is above 20% at 27. So it qualifies on either one of those. And the one to the south here, it's got a higher MFI total, but its poverty rate is high enough that it qualifies that way. And then this far north one here qualifies. And this far south one also qualifies. So that's a little. Look at the, at the map right there, using Laurel as an example. Let's see what else can we do here? Let's. Let's see if we get a few more examples here. Puerto Rico. Let's go to Puerto Rico. So another thing we can do is we can jump to any particular territory or state. So let me select Let me get off of this first here. Let me turn on all of the layers. Basically I've got the current ozs, oz 2.0 eligible and I've got the fate view. I've also got rural shading on. You can turn that on and off. I'll just take a look at this really briefly because we haven't had a chance to look at that just yet. I'll zoom into my town here, Fort Worth, Texas. You can see Fort Worth got too much going on here. Shut off some of these. I'm just looking at Oz 2.0 eligible right now. Fort Worth you can see and Grand Prairie, Arlington, Dallas, all of these light gold colored tracts. If you go south into Johnson county south of Burleson, you start getting into rural area here where these, these census tracts are a darker shade of that amber or gold color. So that means that they are rural. You can turn on and off that rural shading if you don't like it. If you just want them all to be the same color, you can do that. But I'm toggling them on and off. So these, these larger more rural tracts would be eligible for the new rural incentives. The area between the Dallas Fort Worth Mexo Metroplex and Waco Waco, you get into another urban area that is non rural. It'll tell you a little bit about the tract. Also if you click onto it it'll say that it's non rural. And click on this one up here in Johnson county outside of Cleburne. We'll see that that one is rural and it's eligible. And click pretty much anywhere on the map too. By the way, I'll show you where the tr. What the tract is, even if it isn't lighting up. It'll show you. Yeah, this is track number 130220. It's not eligible. Poverty rates too low. Percent of area MFI is too high. So. And that one in Burleson is just within the Dallas Fort Worth msa. So it would be non rural. Okay, somebody wanted to go to Puerto Rico, so let's go to Puerto Rico right now. I promised you we'd go to Puerto Rico. Now fly to Puerto Rico. So now I got the Puerto Rico view here and because I'm zoomed in on Puerto Rico, it's telling me a little bit about Puerto Rico on the map here too. 863 current OZs designated in 2018. Only 712 OZ 2.0 eligible tracts. And the state may nominate up to 178 using that 25% cap rule. So again, right now we're looking at OZ 2.0 eligible tracts in Puerto Rico. We have rural shading turned on. So you can see that a lot of these areas are actually non rural. Really got to get out here, turn the western side of Puerto Rico away from San Juan in the mountains here, few, few towns in the south away from Ponce, got Vieques over here, Culebra. These are, these are rural, but you got quite a few urban tracts in and around San Juan. And these other towns, Carolina, Rio Grande. So that's, that's Puerto Rico we can turn on. Let's turn on the Oz 1.0 layer. It gets really busy in Puerto Rico because all of the tracts, all of the low income tracts in Puerto Rico were designated as opportunity zones. You really have to hunt and pack to find non OZ land in Puerto Rico currently. So some of the areas in Carolina near the airport are high net worth enough that they did not qualify for designation under Oz 1.0. Few of these neighborhoods here as well south of San Juan are not ozs. Yeah, it's easier to point out the non Ozzies and the Ozzies as you can see. And then we can look at the Fate view. And this will show us. Yeah, that's what we want. This will show us whether a tract is eligible for redesignation or not. And in some cases some of the tract is eligible and some of it is not because the, the boundary of the tract actually changed. I'll see if I can find an example of that. I think this looks like one right here actually. So look at this tract right here. 55.6% of this tract is eligible for redesignation. Well, so how is that possible? Let's zoom way in on it. And I'm going to turn on the OZ 2.0 eligible tracts here. And you can see I kind of toggle that on and off. In 2010, this area was one big census tract. And the Oz 1.0 designation process used the 2010 US Census map to determine where the census tracts and where the boundaries lay. Now we've had a new decennial census since then we had the 2020 census. So now we're using the 2020 census tract boundaries. And in 2020, the population of this area grew to the point where the Census bureau decided to split this tract into two, like so. And so now this east side of this old 2010 tract is a new tract and it is OZ eligible. But this side on the left here is not eligible. Turn off this fate view. You can see. I'll turn off this view as well. You can see this old tract here. Not eligible. Its income's too high, Its poverty rate's too low. This area here to the east is eligible. It's got a high poverty rate, has pretty high area MFI as well. But it's below 125. So it, it does qualify based on the poverty rate. So that's a, that's an example of a track that was split in half, more or less. Where one side of it is eligible for redesignation, the other side is not. And then you can see still a pretty large amount of the island is eligible for Oz 2.0 designation. But quite a few tracts have fallen out of of eligibility just due to the fact that the, the criteria for being Ozzy eligible has changed. So this is one that would have been eligible under the old rules, but now isn't. Let's see, that one also would have been eligible under the old rules, but isn't. This one would have been eligible under the old rules, but now isn't. So you get, you get the point there. All right, let's see. Where else do we want to fly to? I did want to fly to. I got a few other suggestions there. I'll. I'll try to hit up a couple more. I don't want to spend too much time on this, but we're having fun, I think. So here's Vermont. So Vermont is the one that has 25 current OZs, 24 OZ 2.0 eligible tracts. And because it's fewer than 25, all 24 of these might be nominated. But I, but I wonder if I'm the state of Vermont, can I find one tract that isn't on the Treasury's official list, but that I think should be on the treasury official list and maybe I sneak in one more tract to bring that up to, to 25. We'll talk a little bit about that later. And then same thing with Wyoming as well. Wyoming. I'll zoom to Wyoming. They only have 20oz 2.0 eligible tracts. The vast majority of them are rural, some here in Casper, Wyoming that are not rural. Casper has a population just a little over 50,000. So these, these two tracks just missed out. And then let's see. Laramie. What are these? These are rural. So Laramie has a population low enough that its tracts are deemed rural. Cheyenne is going to be deemed non rural though it has a larger population. So those are the two tracts in Cheyenne that are eligible and almost certainly will be designated as opportunity zones. By the state of Wyoming. All right, let's see what else did we have? Clear Creek County, Colorado. Let's try that one. Clear Clear Creek county. Try saying that 10 times fast. So here's Clear Creek County. It doesn't look like a whole lot's going on here in Clear Creek County. Probably be worthwhile for me to draw county lines if you do a search for a county. But it, I don't see any OZ 2.0 eligible tracts in Clear Creek County. Let's see, here's, that's Lake county, that's Eagle County. So Idaho Springs right here. This one tracked 148 in Clear Creek County, Idaho Springs and the Argo Mill. This was designated an opportunity zone in 2018. It is not re eligible for opportunities on designation. Reason being. Let's see if I can click it again. Poverty rates really low. And the median family income is 79.9% of the MSA's median family income. Now by the way, under the OZ 1.0 rules where you had to be at or under 80%, this would have qualified just barely for it was the eligibility because they dropped the, because they dropped this value to 70%. In the new definition of low income community, it is no longer eligible. So I'm afraid that Clear Creek county is out of luck. Unless I'm missing something here, but let's go to the next one here. We got, we got an address. Let's go to 384Peach. Peachtree street in Atlanta, Georgia. Oops, my copy paste isn't working. I'm just going to type it in. 384 Peachtree Street, Atlanta, Georgia. If we can find that autocomplete didn't work. But there's, there's the push pin there. Okay. It looks like it's in a tract that is not eligible for Oz 2.0 nomination. The poverty rate's too low. Poverty rates only 16.6% and the median family income is $164,000, which is much higher than the MSA's median family income of 107,000. It's 153% of the Atlanta MSA median family income. So that's, that's a pretty affluent neighborhood here just north of Downtown Atlanta. Oz 1.0. It didn't meet the criteria or I don't know if it might have met the criteria, but it, it wasn't not, it wasn't designated as an opportunity zone under O 1.0 either. So that one unfortunately looks like it is not eligible. We got, we'll just do a few more of these. Why not? We're having fun here, right? This is my favorite part. What time is it? We got plenty of time. Orange County, Florida. I think this is where Disney World is, if I'm not mistaken. So quite a bit going on here in Orange County, Florida, covering Orlando. Oh, fun fact, by the way, Orange County, California is home to Disneyland and Orange County, Florida is home to Disney World. How about that? Walt Disney liked counties named Orange, I guess Used to be nothing but orange groves, far as the eye could see. So here's what Orange county looks like, the greater Orlando area. We'll turn off this layer here. That's what Oz 1.0 looks like currently. When you look at the fate view, kind of toggle that on and off. If they turn teal, that means they're eligible for redesignation. If they turn gray, that means they're ineligible. So we can kind of zoom into a few of these here. That one's fully re eligible. Fully real legible. A lot of these are fully re eligible. It looks like the teal shading actually gets lighter and lighter the less eligible it is. This one here is partially re eligible. Says 0% of the land. So there must have been like one little sliver of the tract boundary that got moved just barely. This one's not re eligible. Not re eligible. Not re eligible. That one also not re eligible. Kind of look at the Oz 2.0. Quite a few tracts in and around Orlando. In addition to a lot of those that are re eligible for designation, these. These green ones are current ozs that are re eligible for designation. These gold ones would be new ones that would be designated. So that gives you a sense of what's happening there in Orlando. And then let's see. We got East Colonial Drive in Orlando. East Colonial Drive, Orlando, Florida. Let's see. It looks like there's two different East Colonial Drive. Three different East Colonial Drives. We'll try this top one here. Hopefully that's the right one. East Colonial Drive runs for a little ways, I guess so I'm not sure like this. This entire street here kind of crosses through multiple zip codes. This still East Colonial Drive over here. Yeah. So East Colonial Drive doesn't really narrow it down. Some of it is in an Opportunity Zone, some of it is not one side of the street. The south side of the street here is currently in an Opportunity Zone, but the north side is not. And we turn on the Oz 2.0 layer instead. This tract here is currently an Opportunity Zone, but won't be eligible for opportunity zone redesignation. Let's see, we get closer to Azalea park here to the east. We got one side of the street would be eligible for Oz 2.0 nomination, but then but the north side would not be. You got to go out a little further east where you get both sides of the street that are eligible. So not exactly sure where along this big street you were looking at, but it looks like some of it is, some of it isn't. Some places one side of the street is, one side of the street isn't. So you're gonna have to kind of take a look at that a little closer on your own time. But we'll, we'll go to. We'll do one more. We'll do Gwinnett County, Georgia, and then I'm gonna call it a day here and get back to the presentation at hand. So Gwinnet County, Georgia, quite a few Oz 2.0 eligible tracts here in the center of Gwinnet county. This is DeKalb county down here. Was it DeKalb. DeKalb. DeKalb. DeKalb Gwinnett county, though. Quite a few. It looks like stretching over here to Lawrenceville. We can look at the 1.0 layer. See. Looks like Gwinnett county only had. I'm counting just three here on the map in the old OZ 1.0 program. And all three of these tracts are fully re eligible for designation. That doesn't guarantee that they will be redesignated, but they are eligible for redesignation at least. And then quite a few additional tracks would be eligible for designation as well. So hopefully that helps all of you out. Thanks for humoring me while I give you a spin of our new map on opportunityzones.com and I had Wyoming selected that whole time, so that's okay that we can still see what's going on. Again, you can jump to anywhere in the country. Take a look. You want to go to Staples Center? I'll take you to Staples Center. Even though it's now called crypto.com arena pretty flexible map. Staples center lies just outside an eligible area, downtown Los Angeles. Quite a few tracks available for designation in the greater LA area. Let's see. Let's switch back to the other view now. Get back to my presentation here. So we just went through that screen share. I'm gonna go for just a few more minutes here. I might kind of breeze through the rest of this because I do want to take spend some time on taking some questions here. Oz 1.0 to 2.0 transition, as I mentioned at the start of Today's presentation, the IRS issued Notice 2026-40 just last week, I think it was, or the week before. And what it does is it is not final regulations, but it is, it is a notice of forthcoming regulations. And the, the transitional guidance can be relied upon in the meantime. Overall did some good things. It also did some not so good things. I'll get to the not so good things in a moment. But you know, the, what essentially was, is it's transitional guidance that kind of bridges oz 1.0 to oz 2.0. If I've got a, if I have an existing oz 1.0 project, can I bring in oz 2.0 dollars for it? And by when do I have to do what? So it kind of defines a lot of how an Oz 1.0 project, which doesn't get cut off at the end of this year, but actually those tracts get cut off at the end of 2028. Unless you're in Puerto Rico, those get cut off at the end of 2027. How does it all work? Right. So first of all, the, the notice did clearly say that for Ozzie 1.0 investors. Anybody who has put dollars into opportunity zones so far or will do so before the end of this year, your deferral date is still December 31, 2026. That didn't change. That wasn't news. It was just confirmation. Your deferral dates, December 31, 2026. And you cannot defer that gain again into a new opportunity zone deal. You're, you have a deferral date on that date and you do owe a tax liability. April 15, 2027. Okay. It also confirmed that pre2027 gains. So if you have a gain today, actually I think is one of the first days in which you can trigger a gain. And if you add 180 days to this day, actually you have to add 179. If you add 179 days to July 7, I think it takes you just barely into January of 2027. So if you sell something today, technically those dollars would be eligible for investment into a qualified opportunity fund in early January. And because you made the investment in early January, you get all the oz 2.0 tax benefits. That's perfectly fine. I promised you an example. So let's walk you through an example. This is an example of a pre2027 gain, but invested after the end of 2026. So you get the full oz 2.0 package of tax benefits. So let's say you Trigger a gain. Not today. Let's, let's give you a little bit more room to work with. You sell something on August 1, 2026 and you generate a $1 million eligible gain from that transaction. You've got 180 days to move that gain amount, that 1 million dollar amount into a qualified opportunity fund. So let's say you pull the trigger. Wire funds into a qualified opportunity fund on January 15, 2027. That's at day number 168, approximately. I'm just kind of guessing. It's, it's within the 180 window. Let's say you hold for at least 10 years. Also, first benefit you get is that deferral period. So normally you sell something August 1, 2026 and you make a million dollars on that sale, you would owe a tax bill following April 15. Let's assume this is getting taxed at a 23.8% rate, which is what most capital gains are taxed at. That's a $238,000 tax liability that would normally be owed on April 15th of 2027. But because you timely reinvested that gain into a qualified opportunity fund, you get to defer recognition of that gain by five years. You don't have to recognize that million dollar gain until five years after your investment. So not even five years after you actually recognize the gain, but five years after you invested. So your recognition date now isn't August 1, 2026, it's January 15, 2032. And what's more, you don't recognize it as a million dollar gain. You recognize it merely as a $900,000 gain. This is assuming a non rural opportunity zone investment. If it's rural, you get to take a 30% reduction, which brings your gain all the way down to $700,000. And then you pay a tax liability based on that amount that would be due April 15th of 2033. So it's quite a long deferral period when you work it all the way out. Now, if you hold your opportunities on investment for at least 10 years through January 15, 2037, the appreciation on that QOF investment is excluded from capital gains entirely, and there's no depreciation recapture. So let's say your million dollars grew to $2.5 million. It's a $1.5 million gain. You'd ordinarily have a pretty large six figure tax bill on that gain. But because that money was invested in an opportunity zone investment through a qualified opportunity fund structure, you claim that capital gain is zero on your income for that year. So no tax liability due new money old zones. So I as I did say you are able to put dollars in 2027 and in 2028 into Oz businesses and projects that are located in Oz 1.0 tracts that don't get redesignated. You can do that. But there's a twist actually. This is new from IRS notice 202640 and the new thing is the, the businesses that the qualified Opportunity Fund deploys capital into have to have a working capital safe harbor plan adopted by the end of this year and have to have 10% of that working capital received into the business and 5% of that working capital deployed into assets before the end of 2026. If you don't know what all that means, I'm not going to go into it in great detail right now, but talk to your CPA or your tax advisor for more information about that. If you're an LP in a qof, you're a passive investor in someone else's fund, a professionally managed fund. So then really something for you to really worry about. But if you're doing your own deals, if you're creating your own qualified Opportunity Fund, if you're raising capital for your own deals, you absolutely do need to be aware of this and please do seek advice from your legal counsel and your CPA on, on this. I will also say, by the way, this is ruffled a lot of feathers needing to jump through all these hoops before the end of this year. Some people have even said it amounts to effectively cutting off the zones two years early. I don't know if that's, I've had quite go that far, but it is, it is a little bit restrictive actually. It's rather, it's quite restrictive. And, and I do wish they would, they would change that date to December 31, 2028. And the industry is working with the Treasury Department right now to, to try to push for a more lenient working capital deadline. But currently, according to IRS Notice 202640 which is really just it's not final regulations, it is guidance that the IRS has given the industry. The current date to have all those ducks in a row is year end 2026. So we'll see if that changes over the next few weeks or months though there's a long Runway for existing projects. The, the, the last day in which you can take a fair market step up to fair market value as an Aussie 1.0 investor is December 31, 2047. Heard some talk about a dead zone. Why would you invest in 2026 versus waiting until 2027. If you have a gain today, you kind of have a choice, right? You can invest it within the next few months, but then you're getting oz. 1.0 benefits. If you were able to wait to deploy your gain dollars into a qualified opportunity fund in 2027, you get all these nice new tax benefits. So you the five year deferral, you get the 10% basis step up 30% for rural. Great reasons to wait. Why should you invest now? Few reasons would be 1 start your 10 year clock a little bit sooner. 2 we know where the zones are right now and you know which projects you're going to go into right now. If you're waiting until 2027, unless you're investing in Vermont or Wyoming or one of the overseas territories with very few tracts, you're not really sure where the zones are yet. You might have some idea of where they're going to be. Maybe you are investing more regionally and you don't care where the zones are. You just know you want to be somewhere in Texas. Let the, let the fund manager sort it out down the road and that's perfectly fine. But just it's something, it's a consideration, that's all. You also have more tax rate certainty in 2026. You know what the tax rate is going to be in 2026. You're not quite sure what the tax rate might be in 2032. And, and you know I mentioned a few slides ago that that million dollar example, you get to defer your gain by for five years and you're recognizing the million dollar gain is 900000 but you're paying a rate based on that future tax year. What is the tax rate going to be in the year 2032? I don't know. It might still be 20% plus 3.8% for most capital gains. But it might go up, might go down. You're not sure. So just a few things to consider. Offless track nominations I don't have time to go into this today in too much detail, but I did mention already that IRS list of the $25,000 tracts that they published is not necessarily the final list. The IRS is willing to hear arguments for why certain tracts might actually qualify that weren't on the list. But the argument has to start with not this is going to be great for the country if this tract gets nominated. Not oh, this tract is going to generate a bunch of jobs. Oh, not oh, this is a great business and a great neighborhood. It's going to revitalize the community. Not this is going to address housing vacancies and population decline. The only winning argument is the census data is wrong. We have other data that shows that this tract does qualify. It has 70% or less area MFI or it has a poverty rate of 20% or greater. That's the only thing that can possibly work with the Treasury Department. Bring your own data, bring your own receipts for why attract actually should have qualified for their list in the first place. And then the treasury has indicated that approvals for off tracked or off list tracked nominations will be very rare. We already talked about who can submit and how. Governor's office is only and the off list nominations are going to be very narrow and mechanical and, and, and pretty rare as well. I think we'll see a lot more about this over the coming weeks. We haven't seen any nominations get published yet. We haven't heard about any off list nominations go through and win yet. But the treasury has indicated that they are going to notify everybody when an off list tract does win approval to be designated. And they'll show, they'll show how, how it was able to win so that other states can, can kind of follow the same formula potentially. So what does this all mean for you? Everything that we've covered today. If you're an investor or a developer or a community leader, it might mean different things. So if you're an investor you can confirm eligibility of tracts that you're invested in or want to invest in. We just did that. We, we did that exercise with the map for however long we spent driving around that map for 15 minutes or so. 40% of current opportunity zones are not fully re eligible. So just because something's an OZ now does not guarantee it's going to be an OZ next time around. It might not even be eligible for redesignation. If you're an active investor. If you're doing your own deals, go to your states now. Even if it is too late, even if the the official window has expired. Make your case. If you're a passive investor, you're not doing your own deals. I don't think there's really much for you to do. Just take a wait and see approach is fine for developers. You should be auditing your pipeline right now against the new eligible list. If you know you want to develop in a particular neighborhood or a set of neighborhoods, use that map right now if you haven't already. Opportunityzones.com map see if that area that you want to develop in is even eligible. And if it is, make sure that you're going to your state or at least your local municipality or county or economic development department. And then you together go to the state to say, hey, please include this census tract number on your list that you hand over to the Treasury Department later this summer. And then if you're a community leader, make sure that you're engaging with your governor's office before the state deadline. Ideally, I know a lot of state deadlines have already passed, but you want to bring track level data. I think you do want to bring narratives as well and work with private sector as well. If you're, if you're a city leader or a director of an economic development department, don't just go to the state without support of the private sector. The state wants to see that you have developers lined up, that you have investors lined up who want to build and who want to invest in your area that'll make the tract more successful. We talked about the two year overlap in Puerto Rico and we pretty much covered all this expanded reporting. We didn't cover this yet. So one other thing that Oz 2.0 does is it expands the reporting requirements for funds quite a bit. You now need to report as a fund. Funds are now need to report the types of businesses that they're investing in, also the number of residential units that they're constructing, if applicable and the average monthly full time employees. Those are really the three new ones that have been published by the statute. The Secretary of the treasury has the ability to expand that list, but haven't gotten any indication that he would do that just yet. And then finally here's a your cheat sheet recap of Oz 1.0 versus 2.0. Again this will be available for download. We'll send this around a little bit later. Five things to remember. New map on the new data. Governors are nominating this summer. We're gonna have a smaller footprint. The off list nomination process is gonna be pretty narrow. And let's celebrate because those are now permanent and periodic. We're out of time. I did want to save some time for questions, so I'll take questions for as long as I can. Got a few more minutes until we're cut off here. So let's see. Note from Connie here says Idaho has not submitted to treasury yet. However the nomination period is closed. Commerce, I believe that's Idaho. Commerce Department told me that the formal submissions will be a public record. So we will be able to see them as soon as submitted. So that's great. Thank you for that information. Connie Kenneth chimes in. He says, hello, Jimmy. Much of the discussion has been focused on timing issues, getting into opportunities on funds rightfully so. I am beginning to have increased questions about the 10 year exit issues, I.e. finite life versus perpetual fund structure. How am I going to get my money back and still benefit from the tax code? How would you advise people we prepare to give investors counsel. Kenneth, great question. Opportunity Zones are not traditional investments. They're not stocks, they're not bonds, they're not index funds, they're not mutual funds. They are not liquid. They are highly illiquid alternative investments. They are exotic. They are not for everybody. I even devote a section in this book to that very point. I think it's, let's see, I think it's chapter four. Chapter four is titled who should invest in Opportunity Zones? And actually the first few words of that chapter are the Opportunity Zone program isn't for everyone. And I do go on to explain who is suited for Opportunity Zone investing and who is not suited for opportunities on investing, because I really do believe that this is an exotic alternative investment that doesn't fit into everyone's portfolio. You need to be high net worth, you need to be able to have illiquid assets, but you need to be able to. That's not what I meant to say. You need to be able to be able to withstand the fact that the money that you are investing into these opportunity zones is going to be illiquid and you won't really be able to get your money out for at least 10 years. That said, if you invest in a good investment, a good project, it should start cash flowing at some point if it's a development deal and most of these are, you should start seeing cash flow in year three or four. There are some newer types of opportunities on investments. I just did a podcast episode on, on a, on a particular fund last week actually that do cash flow from day one. There's some oil and gas Opportunity Zone investments. There's that post development multifamily fund that I invested last week that starts cash flowing right away. When do you get your principal back? Really? You don't get that back until you exit or there is a refinance. And you're going to have to talk with different funds about their different strategies for doing that. But how would I advise that you prepare to give investor counsel? I guess kind of what I just said, it's not for everyone. You need to be able to withstand having some illiquidity in your portfolio if you haven't met your Very basic investment goals. Figuring out what your time horizon is, your investment horizon is figuring out what your asset allocation should look like. Figuring out what your risk return profile should look like based on how old you are, what your goals are. Get those basics right first and then start sprinkling in opportunity zones. In the mix again though, this is an investment advice. I'm not your advisor, but that's part of what I might say to a friend. Excuse me, Jeffrey says please explain how to handle the cash needs of investors at five years when they anticipate staying in an Oz fund for full 10 years and must cob up cash for gain tax at five years. Yeah, Jeffrey, good question. I'm going to say something a little controversial. I don't think this burden really falls on the fund. I don't think the fund should really be doing tax planning for the investor. I think the investor has to be able to be able to tax plan for his own tax event. And if the investor has a million dollar gain that he rolls into a qualified opportunity fund, the investor should not expect that that fund will have cash available for him at the five year mark so that he could pay his tax bill. It's a great benefit if the fund is able to do that. And I know there were a lot of funds in Oz 1.0 that were projecting the ability to do that. It when the, when the program first started in 2018, 2019, 2020. What happened after that? We had a pandemic. Then we had an interest rate hike, a series of interest rate hikes actually. And some of those refinance projections didn't bear out. And I'm very curious to see what happens over the period of the next nine months or so. If anybody gets into a little bit of a sticky situation where they're not able to pay their tax liability, I'm sure that will happen. But really I think the burden does fall on the investor. The investor needs to plan for every eventuality the investor cannot assume. Although it would be nice if the fund is able to provide some sort of liquidity in the form of a refinance distribution potentially or some other type of cash flow for the investor to pay that tax liability. The investor needs to be sophisticated enough to find that cash elsewhere. Potentially. That would be my, that'd be my what I would say. Let's see. David says USVI and other areas have not issued public guidance since all tracks will be rural qoz. That's a good point. Yeah. Usvi, all of their tracks are going to be granted. Let's See, Audrey asks, given the reduction, the jurisdictions must still pass the eligibility guidelines, right? Yes, I believe. I believe the answer is yes to that. I'm not 100 sure what you're saying, but I think, I think we probably answered your question when we were going through the map. Let's see if we had anybody else here with any other questions. Jeffrey asks, where can we find your podcasts? Jeffrey, Great question. Podcasts are available anywhere you listen to podcasts. We're on YouTube, we're on Apple podcasts, we're on Spotify, we're on Amazon Music. Just do a search for Opportunity Zones podcast. You can't miss it. You'd also find it on our website if you go to opportunityzones.com podcast so thanks for that question there, Jeffrey. I'm going to type that into the chat right now too. Opportunity Zones.com podcast. That'll take you straight to the homepage for the podcast and you'll be able to link out. It links out to everywhere where we are available. Let's see a couple other questions here. Matthew asks on a currently eligible oz tracked 1.0, which sounds like they are good through 1231 28. Correct. Except for Puerto Rico are only good through 123127 with an opportunity Zone with an investor who has a gain after 11:27, would they be taking advantage of the newer, better Qoz2 benefits on the Qoz1 track or would they have to take the Oz1 benefits which expire? Yeah, good question, Matthew. They would get the oz2 benefits. Any dollars that go into a qualified Opportunity fund after the end of this year, they get the oz 2.0 benefits, period. Now the fund has to be in compliance with the program. The fund has to deploy the dollars into good Opportunity Zone projects. So the Opportunity Zone projects need to be located in Opportunity Zone census tracts in order for the fund to stay in compliance. They have to deploy into Qoz 2.0 tracts with no restrictions or into old Qoz 1 tracts that were not redesignated. But there are some restrictions there. I covered that a little bit. It's covered in great detail in IRS Notice 2026-40 that came out a couple weeks ago. There are some hurdles that have to be cleared regarding the working capital Safe harbor business plan and and certain amounts of cash have had to already come into the project and deployed into the project. All right, let's see. What other questions does everybody have? Adam says, what does 10% working capital mean if you have an oz 1.0 and are raising 25 million LP but total with debt and land, etc. Is 80 million. Then is the 10% on 80 million or 25 million? Adam that's a great question. I would say you need to talk to your tax Counsel or your CPA, but the 10%, the, the quick answer. Your question is neither necessarily it might not be either one of those numbers. It's not necessarily the 80 million. It's not necessarily the 25 million. It's whatever your working capital is according to your written working capital safe harbor plan. So you can have working capital of potentially 60 million or 70 million or maybe the full 80 million for that particular project. And I don't know what kind of restrictions there are around what that needs to look like. That's and I don't have time to go into the weeds on it with you right now, unfortunately, nor am I experienced or expertise enough to be able to go into the weeds on it with you. I only know enough to be dangerous and I don't want to steer you wrong. So I would say you really need to talk with your CPA or your tax counsel on that. Let's see a few more questions here. Scott asks regarding Puerto Rico. Obviously MAP is changing. My understanding is that the taxing body in Puerto Rico is basically saying they are mirroring the U.S. federal IRS code for the program. Would you say that is an overall true statement? There is no US Federal tax in Puerto Rico. Without extending your time today too much, can you comment about the taxation body in Puerto Rico versus the U.S. scott, I don't know the answer to your question. Really sorry. I probably should. So I don't know that I can comment about it. I don't really know a whole lot about Puerto Rico tax law. I know plenty of people who do. Ashley Tyson, if he's on here or if he's not on here, he's still he'd be a great one to ask. He knows quite a bit about Puerto Rico tax law. I could put you in touch with them if you're if you're interested. And I've got a few other contacts down in Puerto Rico who know quite a bit about that. Send me an email, Scott. I'll try to connect you with somebody later today. You can reach me@infoportunityzones.com let's see, we're definitely in overtime right now. Thanks everybody for sticking with me. We're going to cut this off just a few more minutes, but wanted to get to a couple of these last questions here. Jeffrey says, jimmy, I noticed in you're something you did a IRR hold analysis with OZ Investment benefits but did not show annual cash flows or annual tax benefits modeled. Is that available from you as a template? Jeffrey not yet. It's something that we have in development and we're probably going to release it to our OZ Insiders members first. I believe you're probably referring to our Opportunity Zone Investment Tax Calculator, which is available at opportunityzones.com/calculator. You can play around with that. It does a lot of cool things, that tax calculator. I didn't have a chance to build in a cash flow model into that one yet though, but I am planning on it's on the roadmap and we'll get that released to our OZ Insiders members first. That's it. We're out of time. We've gone over thanks everybody for joining the big show today. This is why I called it a super webinar. It wasn't just a webinar. This was the Oz 2.0 super webinar. Appreciate everybody for joining today. Thank you so much. We'll get the recording out to everybody very shortly. And if you're interested in learning more about Opportunity Zones, you can always learn more on the podcast opportunityzones.com podcast. Thanks everybody. That's it for today's show. Thanks for listening. The Opportunity Zones podcast is produced by OpportunityZones.com, the world's leading authority on Opportunity Zone investing. This podcast is available on YouTube, Apple, Spotify, and all other podcast listening platforms. Just hit that subscribe or Follow button to get all of our new episodes as we release them, and we'll be back soon with another exciting episode. Sa.