| Conceptualizing The GO Zone And What It Means For Investing |
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| Written by Mikey Backybacksac |
| Saturday, 21 November 2009 15:30 |
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Understanding the GO Zone and how to profit from it, real estate-wise, can come in quite handy when one is considering investing in properties down in what is known as the "Gulf Opportunity Zone." This opportunity zone was created as a result of Hurricane Katrina in 2005 and is more formally known as the Gulf Opportunity Zone Act of 2005. There are a number of significant economic incentives involved.
Understanding the GO Zone and how to profit from it, real estate-wise, can come in quite handy when one is considering investing in properties down in what is known as the "Gulf Opportunity Zone." This opportunity zone was created as a result of Hurricane Katrina in 2005 and is more formally known as the Gulf Opportunity Zone Act of 2005. There are a number of significant economic incentives involved. Everyone understands that Hurricane Katrina struck the southeastern coastal states of Louisiana, Mississippi and Alabama particularly hard. Since then, all three states have been struggling mightily to get back to a point of economic equilibrium that is being hampered by the need to devote significant resources to rebuilding to overcome the effects of this very strong storm. Congress has enacted several pieces of legislation aimed at providing timely relief, and this particular Act is considered by many legal experts to be one of the most significant and powerful recovery tools ever offered by the Congress. There are, contained within the Act, a number of economic incentives aimed at helping these three Gulf Coast states recover fully from the ravages of the hurricane. In their totality, these incentives are designed to create conditions necessary for rapid private investment in the Gulf Opportunity Zone (GO Zone) within certain defined windows of opportunity and time limits. It has to be said that these economic incentives and opportunities are extremely powerful and those who are considering investing in the area are advised to take full advantage of them. Currently, the federal government is allowing those who wish to invest in certain property opportunities in the zone to benefit greatly from relaxed depreciation rules. Specifically, normal depreciation can be speeded up in the first year to 50% of the cost that was invested along with the normal depreciation. This bonus has created a set of powerful economic incentives. Additionally, the Act has provided for a wide range of incentives such as a business that chooses to operate in the GO Zone to do what's called a "carry back" of their net operating losses. In accounting this is known as a 5-Year Net Operating Loss (NOL) Carryback. Businesses can carry this NOL forward for up to 15 years. This is significant in terms of investment potential. For those interested in exploring investment opportunities for not only business but also for residential real estate located within the zone, it is a good idea to find one of several high-quality Internet-based businesses that exist to help educate and then give sound advice to those who are looking to purchase homes or businesses within the zone. This opportunity to find a quality residential property existing in the Gulf economic zone is probably one of the best attractions when it comes to the GO Zone. Remember; always take the time to educate one's self about these opportunities before jumping into any sort of investing or commitment. Still, given the powerful incentives, the attraction and potential return are very high. DISCLAIMER: This article is provided as information only and is not to be taken as financial advice. |