123 | Why Smart Entrepreneurs Are Moving Millions into Opportunity Zones with Ashley Tison

Patrick: [00:00:00] What if the next big tax strategy for entrepreneurs wasn’t just about keeping more of your money, but also putting that capital to work revitalizing communities across the country? Welcome back to another episode of the Vital Wealth Strategies Podcast. I’m your host, Patrick Lonergan, and this is the show where we break down advanced tax strategies, wealth building ideas, and practical frameworks that help entrepreneurs keep more of what they earn and deploy their capital more intentionally.
Today I’m joined by Ashley Tison, co-founder of OZ Pros, a nationally recognized opportunity zone advisor that has helped investors and entrepreneurs defer more than $1 billion in taxes. While channeling capital into projects that create jobs and housing, Ashley is practicing attorney, a magna cum laude graduate from UNC Charlotte and UNC Chapel Hill School of Law, and is widely known as the Oz Sherpa.
For his ability to simplify the complex rules around opportunity [00:01:00] zones and help investors stay compliant and strategic, you will hear him rework some of my limiting beliefs around how to utilize an opportunity zone. And expand my thinking on the options to pay less tax and build more wealth using this tool.
In this episode, we break down opportunity zones in plain English, how the program started, and how investors can potentially defer taxes even after a capital gain from stocks, real estate, crypto, or selling a business. This. We also talk about the biggest myths in the opportunity zone space and how to evaluate deals that can produce both financial returns and meaningful community impact.
Before we jump in, if you enjoy learning about strategies like this, make sure to visit vital wealth.com/resources where you can access our vault of tax strategy and wealth building tools. It’s built specifically for entrepreneurs. Again, that’s vital wealth.com/resources. And if you enjoy the show, take a moment to leave a review.
It helps more entrepreneurs discover the podcast. It allows us to keep bringing you conversations [00:02:00] like this. Now let’s get into my conversation with Ashley Tison. I’m excited about our conversation today. We’ve got Ashley Tison on the show, and we’re gonna talk about opportunity zones and just.
Specifically get into, uh, opportunity Zones 2.0. They’ve changed with the big, beautiful bill and it’s, uh, it’s going to be a lot of fun. Ashley, thanks for joining us here today,
Ashley: Patrick. Appreciate you having me on. It’s an honor and a privilege.
Patrick: Yeah. So I, I want to dig into a few of the problems that entrepreneurs face when we’ll say a massive tax bill is coming down the road from a, a large capital gain.
And we typically see this from a few different places. Um. We can see this from exit of a business. We’ve got a number of clients this year that have been, uh, selling their business or getting ready to sell the business. Uh, we also see it in real estate. You know, we, we see longtime owners and they’re like, man, this has been great, but I’m, I’m sort of tired of being a landlord.
I’m ready to get out of this. And, uh, they’re hanging on, hanging on for dear life. They’re tired, but, uh, uh, they don’t wanna pay the tax, so they’re, they’re just like, we’re just gonna, [00:03:00] we’re gonna avoid this for as long as possible. So. We can also see it. We’ve had clients, um, not so much right now, but we’ve had clients with huge crypto gains as well.
Ashley: Yep.
Patrick: And, um,
Ashley: we
Patrick: think that’s, uh,
Ashley: I wish that that was still a problem.
Patrick: Yeah. Yeah.
Ashley: I saw your bitcoin mining episode. Yeah. Uh, I had to shut my miners off the other day. I was like. Hey guys, we’re, uh, we’re like in the red in a big way on these things.
Patrick: Yes. So, um, you know, Bitcoin, I, I believe it’ll come back. Uh, it’ll come
Ashley: back.
Patrick: The, the tattle baby
Ashley: Hoddle.
Patrick: That’s right. Uh, I love it. And there could just be other. Uh, investments that are made. You know, you, you could have been early in a particular stock, right? Like if you were, uh, been holding onto Nvidia stock forever and you’re like, man, how am I gonna ever get outta this?
Ashley: Yep. Or that silver that you got, you know, like scrounging around somewhere, right?
You know, that you probably paid a nickel for and it’s now worth 80 bucks,
Patrick: right?
Ashley: Yeah. [00:04:00] So, or, or you know, or those, those silver American Eagle dollars that you actually paid a dollar for. Right. Literally they’re worth a hundred bucks a piece now. So any kind of capital gains you can use, uh, opportunity zones for,
Patrick: for sure.
And so then I also think about the internal problem that the entrepreneur has, right? They’re, they’re frustrated that their years of hard work are going to be heavily taxed. And we, we think about the tax that’s gonna come along with that. It’s, it’s capital gains tax, 20% federal, uh, potential 3.8 Medicare share tax.
I was
Ashley: just gonna say, baby, don’t forget the, don’t forget the nick.
Patrick: And then, then we also gotta be mindful of, uh, state income tax, you know? Yep. If we’re in New York, it’s another 10% plus California could be 12% plus it’s, uh, uh, it’s like 14 in
Ashley: California last time
Patrick: I
Ashley: checked, right?
Patrick: Yeah.
Ashley: Yeah.
Patrick: So, so we think about that and it’s like, okay, I’m, I could be over a third of my, my value that I’m going to recognize a third of my gain I have to give to taxing authorities who added, because you’re in [00:05:00] California, it’s almost
Ashley: half
Patrick: right?
Yeah. It’s insane. So. So I look at all of those things and, uh, I, I think it, it’s really hard for the entrepreneur to swallow. They’re also uncertain about, you know, the tax strategies that are out there and what they can execute on. They’re also worried about making the wrong move, man, what if I get outta this and I move into something else that I think is a good deal, but man, it doesn’t work out.
And then there’s, I, and I think this is good and we’ll, we’ll probably get into some of this, but, um, skeptical of advisors pushing some trendy tax shelter thing that, uh. Could blow up down the road like that. That can be, they, that can be scary. What they want is clarity and confidence before employing large amounts of capital.
And then philosophically, we just, entrepreneurs believe it. It shouldn’t be this hard to keep the wealth that I’ve worked so hard to build. So, um, Ashley, I’m, I’m looking forward to getting into this discussion today. Can you give us a little bit of your background and how you’ve helped? Entrepreneurs launch, uh, hundreds of opportunities owned [00:06:00] businesses and advised in those, those, those processes.
Ashley: Yeah, absolutely. So it’s, uh, you know, we were talking about this earlier, but God bless the broken road that led me here today. Right? Yeah. So as I look back upon, you know, kind of a convoluted history, I, uh, you know, so I, I played basketball at UNC Charlotte. Mm-hmm. Played a little bit overseas and then, um, came back and went to law school.
And at the time it was, you know, a OL and all that kind of stuff was happening was crazy. Mm-hmm. And so I got out and I went to work for a big law firm because they were paying so these ridiculous salaries. Mm-hmm. And um, and you know, it took me about five years for it to have sufficiently sucked my soul dry.
Yeah. And so right around that same time, I, you know, was like, you know what? I really want to do something with my money. So I started an impact investment company back in 2005. That was my foray into real estate, like to kind of get my entrepreneurial needs met.
Patrick: Mm-hmm.
Ashley: I like to kid around that. I am an [00:07:00] entrepreneur trapped in a lawyer’s body.
And so that was my first foray, entrepreneurially. And at the same time I, uh, I went to work in-house with a client, like a former client. Mm-hmm. And I was assistant general counsel for a tenant and common syndicator. Yeah. And commercial real estate developer. So we built La Fitnesses and food lions and uh, we actually developed a number of hotels in Manhattan, and then we would tenant in common, we would tick, tick them out.
Mm-hmm. So we would syndicate the equity to a number of 10 31 investors and we distributed that product through a network of broker dealers, uh, throughout the country. And so I got to kinda learn like really sophisticated real estate transaction. Like, you know how to do transactions and also sophisticated real estate finance.
And so when the commercial real estate market crashed, I, uh, I had decided that I wanted to get, you know, more risky real estate. And so I had actually become a general counsel for a golf course [00:08:00] developer, and we were developing a golf course in the mountains of North Carolina in April of 2007. So. When Lehman Brothers happened, I was like, Hey guys, I gotta go back to practicing law because I know that you are not gonna be able to pay me.
And um, so I did, I went out and literally I was like doing traffic tickets. I mean, I was hustling because there was nobody hiring lawyers back in 2008.
Patrick: Yeah.
Ashley: Uh, you know, as I did that, I, I started doing some m and a work where I did sell side, and we actually built that up. We built that into a substantial firm.
I had a couple different partners kind of along the way, but ultimately I, you know, built that into a software product where we were doing third party transactions for entrepreneurs in order to help them, uh, bring Wall Street level sophistication to main street level business mergers and acquisition transactions.
So, as I was doing that, I saw how much money they were leaving on the [00:09:00] table in the form of taxes. Or just kind of just not really taking care of their business and really focusing on the fundamentals that drive company value. And so I was like, you know what? I’m gonna set a bar, you know, about creating a company that actually helps people do that.
Mm-hmm. So I sold my law firm. In an earn out type transaction, and I went about doing that. Unfortunately, people don’t like to talk about their demise, so a succession planning practice is really hard to get inbound traffic on. So I was at A CLE and I heard about this guy talking about opportunity zones in the Tax cut and Jobs act.
Mm-hmm. And he was talking about how, you know, in three pages that they, you know, created this powerful incentive. And I was like, I ran him down afterwards, I was like, Hey man, that sounds like 10 31 in private equity got married. And he’s like, oh. And it had a beautiful named Opportunity Zone. So. We, uh, we popped up a website with my team and, um, spent about a thousand bucks on [00:10:00] AdWords and we had 150 inbound leads and $75 million worth of capital looking for deals.
And I was like, all right, we’re doing opportunity zones. And so there
Patrick: you go.
Ashley: Kind of became one of the, the one of the original experts. So I, I guess you could say I’m OGOZ. Um, and you know, through that, I, I was blessed with a tidal wave, right? Mm-hmm. I was best blessed with an opportunity to be able to surf that, and we took that software package and we redeveloped that in order to create captive opportunity funds for people.
Because a lot of people get intimidated by when they hear opportunity fund, they think that they gotta be like this massive. BlackRock fund manager. Yep. And we set about trying to dispel that myth and to put what I think is the most powerfully, uh, legislatively created tax incentive ever to put that into the hands of Main Street level investors.
And that’s what we do at Ozi Pros.
Patrick: I love it. So, I I, before we get into [00:11:00] Opportunity zones, and I, I’m looking forward to this. There’s so many parallels. Uh, I was a basketball player in college. Went to law school. I was late for my first class, buying a piece of real estate, actually didn’t graduate. I’ve been involved in attendance and common tick opportunities on the investment side and the.
Early two thousands. Um, and uh, so it’s so interesting to see how our, our paths are,
Ashley: you’re like
Patrick: a
Ashley: brother from another mother that I didn’t even know existed, man.
Patrick: I know, I know. And then, then we were talking about before we started just, uh, you know, our connection on the faith side of things and C 12 and some of those other things.
We think that, um, that’s all good. So. Um, Ashley, we’re gonna have to continue this conversation after the, the episode ’cause this has, this has been great, so
Ashley: Sure.
Patrick: Can we step back just a second and, and talk about an opportunity zone and, and maybe it makes sense to, and I’ll let you sort of decide where we go with this, but maybe it makes sense to talk about how it worked in 1.0 and then how [00:12:00] that’s coming to an end.
And then we’ve got 2.0 that, uh, is, is off and running. So,
Ashley: yeah. So let me give kind of a general overview first and then. I definitely wanna hit 1.0 because there’s mm-hmm. Some definite benefits for folks before the end of the year, like once in a lifetime benefits. So an opportunity zone, like I said, were created by the Tax Cut and Jobs Act of 2017, and what that allowed investors to do is to take any kind of capital gain, long-term or short term if they put it into a qualified opportunity fund within 180 days.
That 180 days, you get flexibility about when you want that to start. If you’re invested through something that your capital gains aren’t, comes on a K one.
Patrick: Mm-hmm.
Ashley: And so if you get it into a qualified opportunity fund, you defer those capital gains and 1.0 versus 2.0 changes the time period on the deferral under 1.0.
They deferred it until December 31st, 2026. Under 1.0 as well is that if you got in before [00:13:00] 2019 or 2021. You either got a 10% or a five 15% reduction in your taxes when you go to pay them on in April of 2027. So those are your first two benefits is deferral and then reduction. And so under 2.0, they actually made the program permanent and now they made it so that you get a rolling five year deferral.
Any investment after January 1st, 2027 defers for five years. And then when you go to pay the taxes, you either get a 10% reduction. Automatically if you’ve held for five years or a 30% reduction if you’re in a rural qualified opportunity fund. So now that now we’re talking like real money on the actual like reduction as well.
Yeah. And let’s not, let’s also not discount that deferral because it’s a five year interest free loan from the government.
Patrick: Right?
Ashley: Right.
Patrick: Totally. Yep. Yep. So many important things I wanna, I wanna highlight here. So a lot of times we’re looking at capital gains tax planning for clients and. [00:14:00] We need to have all those strategies buttoned up before the transaction happens.
What I heard you say is we have 180 days, potentially more depending on, I’ll call it our entity structure that owns that asset. And I can, I can effectively do tax planning after the fact. Uh, absolutely utilizing an opportunity zone. So if you’re listening to this and you’ve had a transaction, you’re looking down the barrel of some, some.
Uh, tax. And this can even apply for 2025, right? That’s right. I go all the way
Ashley: back to January 1st, 2025 if that gain came to you on a K one.
Patrick: Yep. So that’s, that’s a tremendous, uh, uh, opportunity to utilize the opportunity zone to, uh, not pay some tax or defer the tax. And, and let’s just put some numbers to that for just a second.
If, if I’ve got a million dollars that I am. Potentially going to pay the pa capital gains tax on, and I’m earning 7% on that. That money, my, my portfolio is [00:15:00] now gonna kick off, uh, or the, the investment in the opportunity zone is going to kick off at, at 7% 70 KA year. Uh, yep. Money to me if I just go ahead and pay the tax and, and let’s just assume I’ve got some state federal net investment income tax in there and it all adds up to 30%.
Okay. Now I’ve only got 700 K invested, and if I’m earning that same 7% now, instead of $70,000 a year, I’m less than $50,000 a year in income. And so I’m, I’m dollars way ahead. If I just took for 21
Ashley: grand a year just on the government’s money,
Patrick: absolutely. And I do that for five years. There’s a hundred K that I saved.
Just utilizing the opportunity zone and then. If we layer in some of the, the factors around,
Ashley: if we only charge 20 grand to set it up, so that’s a five x return right there.
Patrick: I love it. I love it. Um, and, and then not to mention the, you know, if we, if we invest in a, a, a rural opportunity zone, you know, I get a [00:16:00] 30% deduction on my initial, um.
Investment. And then what happens to the game? Like if, if the
Ashley: investment appreciation, well, the 30% is gonna come off what your tax bill’s gonna be five years out. So number one, you’re gonna get to play with the government’s money. So in that exact example, normally you’d be paying $300,000 in taxes, but in this case, you’re gonna save 30% on that.
So you’re gonna pay $210,000 in taxes.
Patrick: Yeah, I love it. Yep. Awesome.
Ashley: Now, once again, that depends on what state you’re in, right? Sure. So,
Patrick: yep, absolutely.
Ashley: But
Patrick: yeah. Okay. Um, yeah, this is, this is great. And so let’s, let’s think a little bit, I, I’m curious about the rural versus urban opportunity zones. Can you, can you walk us through those and who’s defining those or, I, I think the, in 2.0, they, they put some restrictions on, you know, uh, where these opportunity zones can be located.
So are they changing drastically from 1.0 where I can invest dollars versus, um. Yeah. From 1.0 to 2.0.
Ashley: [00:17:00] Yeah. So the 1.0 tracks were, so each governor got to designate up to 25% of their low income census tracks, and then they had a certain threshold that they could nominate contiguous tracks to those tracks.
Mm-hmm. And so they eliminated that contiguous opportunity in the 2.0 rule. They also tightened up what low income is. Mm-hmm. Like what the criteria is. Right. To make it so that it’s actual poverty. Yeah. Then the third thing that they did is that this is now based off of the 2020 census as opposed to the 2010 census.
Mm-hmm. So the 1.0 tracks, which you can find@ozipros.com slash map Yeah. Are unbelievable. There’s some unbelievable tracks in there that are going to go away. Yeah. And the good thing is, is that they don’t go away until December 31st, 2028. And so. There’s some like potential transition rules relative to like if you start a project on December 30th, 2028 in a 1.0 zone, right?
Like what are the rules [00:18:00] relative to being able to finish that project? We’re waiting on those from the IRS. They’re gonna have to have something, but mm-hmm. It is a closing window of time to be able to do deals in the 1.0 tracks. And so the 2.0 tracks, I think they’re gonna be good, but they’re not gonna be as good as some of the 1.0 zones.
Patrick: Got it. This is great. So I’d be, I’d be interested, Ashley, in you talking through, like, when I think about opportunity zones, I’m gonna, I’m gonna highlight some ways that I, I’ve seen it done and then I want you to sort of reshape my thinking on this. So, uh, the first one is I can go, uh, start a business. I can go buy some property in an opportunity zone just directly.
Like I can just. I believe I actually, uh, I’m in, I’m in Iowa. I believe the area I’m in is an opportunity zone, and if I hear
Ashley: that
Patrick: we gotta talk. If I the business, uh, if I start it and sell it, I think there’s some, some unique [00:19:00] opportunities there from a capital gains tax perspective. Uh, same thing with some of the real estate, but that, that’s pretty heavy, right?
Like I gotta be committed to that and, uh, I might already have an operating business and I don’t, I don’t know if I want to necessarily. Move my operations to an an opportunity zone. Um, and then, uh, we’ve also seen other real estate opportunities that are, uh, developing property in these areas that I can come invest in and, um, enjoy the, you know, however that deal goes.
If it goes great, you know, I get the upside if it doesn’t go great, I, uh, I got some tax benefits, but, uh, you know, maybe lost some money along the way. So those are the two areas that my, my head’s at on opportunity zones. Can you walk us through. The gaps, the, the areas that are missing there. Sure.
Ashley: Okay. So this is the biggest thing is that I wanna make sure that everybody understands that it’s not that much of a lift.
Mm-hmm. It is really not that complicated. Now, there are nuances to it, and you wanna make sure that your professionals are aware of [00:20:00] those nuances, but at the end of the day, it’s fairly simple and we’ve set up literally thousands of captive opportunity funds. For people exactly like yourself, and we’ve walked them through the upsides of why opportunity zones are a big deal and why they should be paying attention to ’em.
So the first is this, is that it’s literally just an LLC tax as a partnership. That’s a qualified opportunity fund. And so you could set up your own. By doing that, you’re gonna be able to put that money into that opportunity zone fund. And then depending on a couple of other things, we usually set up A-Q-O-Z-B underneath that, a qualified opportunity zone business.
Mm-hmm. And you’ve got a time period from when you need to move the money from the fund down to the QOZB. But in all of those instances, you control the bank account. And so in a captive opportunity fund, you’re literally able to defer the taxes. By moving from your money, from your left pocket to your right pocket and then while you’re waiting, right?
So [00:21:00] you know, you, it takes you, you have between 37 and 43 months before you actually have to deploy the cash During that period of time, you can use that money for other stuff. Right now you gotta charge yourself, you gotta loan it out to yourself and there’s nuances and that kind of thing to it, but you get access to that money if you need it.
Patrick: Mm-hmm.
Ashley: So that’s the big thing. Second thing is, is that it could be very flexible relative to the business that you want to do. So I’ve got folks, and I’m helping people do this. I’ve got RIAs that are starting a new RIA and they’re like, okay, well you mean to tell me that the next 10 years of growth and potentially 30 years of growth are gonna come out completely tax free just by locating an opportunity zone and having 50% of my employees work outta there.
Yep. Done. And so now they’re like, okay, hey, let’s look at, if I’m in a zone, that’s a no brainer. If I’m outside of a zone, hey, maybe it makes sense for me to look at buying some property in a zone and maybe moving my [00:22:00] business, but if I’m buying a business from the start, right, certainly one that’s in the zone and maybe even one that I can move into the zone, that’s obviously, that’s also a really good alternative too.
Patrick: Yeah. This is, can I ask a nerd question? Sure. Um, and, and this is, uh, uh, this, this might get into some, you mentioned buying a business. So oftentimes we see business acquisitions happen two ways. There’s a stock sale and there’s a an asset sale.
Ashley: Yep.
Patrick: If I buy the stock of that business, is that, that there’s already establ in the opportunity zone?
Does that, does that benefit me at all? Do I, do I get to take advantage of some of that? I’ll say, uh, runway that’s already been. Started? Or is that, does that not help me?
Ashley: A lot of it depends. Right? So when your QOF invests into A-Q-S-E-B, it’s gotta get original issue membership interest for cash.
Patrick: Okay.
Ashley: So a lot of times if you’re actually purchasing it, it’s a little bit tough for us because you can’t have a [00:23:00] transaction where the money goes out to the seller.
Yeah. Now you can absolutely buy assets. Mm-hmm. And the only thing that has to meet the opportunity zone. Requirements to be qualified opportunity zone business property in which 70% of your assets need to be, that is your physical hard assets. Mm-hmm. And so as long as those are in the zone, and as long as they’re either original use or they’re substantially improved, then you’re good to go.
Yeah. And so I can walk through, right? So if somebody’s got questions about that, I could walk through the specifics on original use or substantial improvement. There’s some nuances too. If you’re buying a heavy equipment, heavy business that’s in the zone. If it’s already been depreciated, then those could be bad assets, but we’ve got techniques where we can usually kind of deal with that, right?
Yeah. Relative to using some leasing strategies. Also like a really heavy lease between your propco and your opco. Um, and you know, so my background is m and a. This is [00:24:00] what I did for 12 years prior to doing opportunity zones. And I, you know, so we, I think we’ve probably done more operating businesses than anybody in the country.
Mm-hmm. And we’ve done ’em with SBA loans, we’ve done ’em with private equity backed stuff. We’ve done ’em all across the board. Yeah. Happy to help.
Patrick: Yeah. No, this is, this is fantastic. Um, yeah, I, I, I think there’s so much opportunity. ’cause when I, when I think about the, um. When we’re doing capital gains tax planning for, for clients, we look at four different buckets and uh, you know, the first one is uh, capital gains tax deferral.
The second one is elimination. The third one is charitable strategies, and then the fourth one is, we’ll call it jurisdiction or location, right? Like if I move from California before my transaction to, um, Florida or Texas, there’s no state income tax there. And I saved,
Ashley: sure
Patrick: I saved it, the state income tax, which helps me quite a bit.
So. I’m just hearing you talk about, uh, all the benefits of the opportunity [00:25:00] zone, and I’m like, cool. We’re checking two of the boxes on both the deferral and the elimination side. I got your
Ashley: third box too.
Patrick: Yeah.
Ashley: Right. Yeah. So for a state that doesn’t, um, that doesn’t conform.
Patrick: Mm-hmm.
Ashley: What we do is we set their opportunity zone fund up in a state that does where they potentially might move.
Yeah. And then they move prior to the 10 years. ’cause the big, the tenures is the big one. It’s a step up in basis to fair market value. Yeah. On everything that your opportunity zone fund owns. Mm-hmm. And so that not only eliminates capital gains, but it also eliminates depreciation, recapture. So it also becomes a really powerful tool.
An aged opportunity zone fund becomes a tool that you can use to buy highly depreciating assets inside of an opportunity zone, fully depreciate them, and then sell ’em 367 days later. And you get a step up in basis to fair market value. And so we are implementing this for people that have fleet management companies.
Mm-hmm. That have like RV businesses, that have [00:26:00] stuff that is, uh, equipment rental. That’s a big one. Where they’re going to have a lot of depreciation, where they may get Z zinged on the depreciation recapture. We’re using opportunity zones to solve that, and then we also can help them solve their location issue as well, because once again, we’re deferring it for 10 years, potentially more.
Patrick: Yeah, I am, I’m wishing we would’ve had this conversation a month or two ago. I’m just thinking of a client right now that had some assets that, uh, some vehicles, they were. Uh, they were, they depreciated, they were gonna move to a different entity. They were gonna have to, uh, recapture some of that. And then I’m just hearing you talk about some of these things.
I’m like, no, I have no idea if it would’ve worked. But like, this would’ve been a really cool way to, uh, at least have this discussion, at least at plant. The
Ashley: seed, right? Because if people have equipment, heavy companies, they need to be looking at Oz’s. At least just look at ’em, right? Yeah. And see, okay, it may [00:27:00] not work for everybody.
Yeah. And, you know, but look at ’em because the power of no depreciation recapture is amazing.
Patrick: Yep. Absolutely. Yeah. No, that’s, that’s so, uh, so good. Um, all right. This is, this is fantastic. Um, because I, I’m especially thinking of like, we, we have serial entrepreneurs out there that are, that are selling their businesses.
Like I’m thinking of one right now that, um. Um, selling his business and he’s looking at the next chapter going, okay, what am I, what am I going to do? And I, I just see opportunity zone as being an incredible way to a, not pay capital, gains tax on the dollars he just received. And then, uh, b, eliminate some of that, that that tax down the road and give himself more time to.
Ashley: Not some of it. All of it,
Patrick: yeah. Yeah. Okay. So help me understand. Yeah, yeah. Let’s walk through this. Let
Ashley: let, I was gonna say, let’s go through your million dollar example. ’cause I actually think that this is good for people to like, just think about numbers, right?
Patrick: Mm-hmm.
Ashley: Yep. You got your [00:28:00] million dollars worth of capital gains that you would normally be paying 30% on next, uh, April.
And so if you’re under 1.0, and this is, I’ll use this as the example. Is that if you go into a project where you can write that down on paper, where you can take a valuation discount between now and the end of the year, you either pay taxes on your original gain amount or the value of your QOF investment at the time.
So you have that million dollar gain. And let’s say that you’re going to build something in the opportunity zone. So you’re gonna be under construction, uh, in, on December 31st of this year. Well, that’s probably worth between a 30 to 50% discount on Sure. Being under construction. Mm-hmm. And so you’re gonna be able to write that down on paper to where it’s between a $700,000 gain and a $500,000 gain now that you’re gonna pay taxes on next year.
Okay? Mm-hmm. Under 2.0. If you wait till, then you’re gonna defer that gain for five years, and then you’re gonna pay the [00:29:00] taxes at either a 10% or a 30% discount. And by the way, the rural designation is that you don’t have more than 50,000 people, or you’re contiguous to attract with more than 50,000 people.
And those designations have been set, and there’s a number of maps. If somebody’s interested, I can walk ’em through how to find it. Yep. So that’s the real economics on the initial play. The second play, and this is the really big one, so let’s use your example where somebody now starts a business in an opportunity zone, and let’s say that it’s a, an equipment heavy business.
So they’re gonna pay taxes, they’re gonna pay taxes normally on income. And so they’re gonna be utilizing the depreciation on those vehicles right over the first five years. And then let’s say that they’ve got like a rolling five year basis where they’re cycling off, um, some of their fleet equipment. So in year six through 10, they’re gonna pay depreciation, recapture on those vehicles that they’re selling.
But then after year 10, right, so, uh, [00:30:00] after year 10, now they’re gonna be able to take that fleet and they’re gonna be able to sell it 367 days later for 90 cents on the dollar. Right? Or 85 cents on the dollar. Yeah. And fully depreciate it. I use that against income. Be able to carry it up to their 10 40 and not pay any depreciation, recapture on that.
So they continue doing that, right? Mm-hmm. For as long as they want. Up to years 30, and then they sell in year 30. And you know, over the course of 30 years, it’s probably 10 xd. Right? Right. Let’s hope that it’s 10 XD over 30 years, right?
Patrick: Yep.
Ashley: Um, I don’t know what the rule of 72 is, but if it’s an operating business, more than likely it probably has.
Patrick: Yep.
Ashley: Absolutely. And so that absolutely million dollars is now worth $10 million. Mm-hmm. And guess what? They don’t pay any depreciation recapture on any of the vehicles or any of the equipment. And they don’t pay any capital gains on that $10 million. Well, 9 million ’cause they had a million dollars in basis.
Yeah, but they don’t pay any taxes on any of that. [00:31:00]
Patrick: That’s incredible. It feels like cheating, you know? Um, and, and
Ashley: hold on. 1, 1, 1 final thing. Right? If that one, if that upright, I’m gonna throw in some two knives. So in addition, so people, a lot of times they hear this. I’m 70 years old, I’m not gonna hold this thing for 10 years, right?
Mm-hmm. And so I’m like, Hey, listen, you, if the, this is the great thing about O Zs is that your estate steps into your shoes. Yeah. Now, if it’s in the first five years and your estate lacks liquidity, you need to solve for that, right? Yep. But after that, they step into your shoes. So the amount that goes against your lifetime exemption amount isn’t fair market value at the time of death.
It’s what you originally put in. And then your estate gets to exercise it after 10 years mm-hmm. All the way up to 30 years. Right. Relative to the growth of that asset with no taxes.
Patrick: Yeah. So you, you, you also just leveled up opportunity zones with the estate tax planning as well [00:32:00] because, uh, the things you just talked about are, uh, fantastic opportunities on the, the estate tax side because so many of our clients have this.
Accelerating estate tax problem and we’re you looking at things like, you know, SP spousal lifetime access, trust gras, and potentially defective grantor trust and all, all the, all the acronyms. Right. By the
way,
Ashley: I can use an IIT and agra inside of an opportunity zone play. Yeah.
Patrick: Okay. Yeah.
Ashley: Which,
Patrick: yep.
Ashley: If you, if you transfer it to an irrevocable trust, that trips an inclusion event, but mm-hmm.
Ant and Agra are still considered grantor trusts. Mm-hmm. And so I can use that inside of an opportunity zone structure. A lot of times they just keep this one outside of it because they’re like, okay, well I know that that’s protected for the next 30 years. Right. Relative to the value. So I’m just gonna.
Go ahead and use that one. Or they could use that grt deal and then get the value of their actual investment now even [00:33:00] down further relative to how much their gift exemption. Of their gift exemption they’re using. Yeah. And then they drop it into the grt and bam, it grows freaking tax free without any, you know, without any taxes for the next 30 years.
Patrick: Yeah, yeah. No, I, I am, I’m thinking of the. Maybe the people that have already used up all, all of their exemptions, right? Yep. They, they’re just sort of left with taxable estate and I’m thinking about opportunity zones and uh. The ability to leverage that for additional estate tax planning.
Ashley: Either that or somebody that’s got a bunch of stuff inside of a irrevocable trust.
Mm-hmm. Or that irrevocable trust is getting crushed on taxes.
Patrick: Mm-hmm.
Ashley: And so they’re concerned about that, is that we can take that irrevocable trust and we can make that an investor inside of the fund. It has a gain. We can take that gain and we can once again defer that gain and then we can have it be the taxpayer.
And so, yeah. I mean, and a lot of these folks, right? So as we’re [00:34:00] helping, and we’re kind of, we’ve kind of moved up the chain, if you will, from Main Street, we’re actually helping a bunch of different family offices Yep. That want to talk about a direct into investment strategy. Mm-hmm. So that, that way they kind of cut out the different middlemen sponsors that are out there.
Patrick: Yeah.
Ashley: And we’re helping them actually allocate into professionally managed deals out of their own captive qualified opportunity fund. Yeah. Where these investor or these developers. Need to round out their deal. Mm-hmm. And so they’ll take a direct investment into the actual operating entity and then they’ll usually give a sidecar into the promote where we can negotiate a really healthy, uh, kind of bonus investment for folks that may not necessarily want to do their own deals or they’re not gonna do deals with all of their cash.
Patrick: Yep. Yeah.
Quick question for you. What’s the biggest challenge you’re facing right now in your business? Maybe it’s tax strategy, cash flow, investments, [00:35:00] scaling your company, or just figuring out the right next move on the Vital Wealth Strategies Podcast. We wanna start answering more of your questions directly. So if there’s something you’ve been wrestling with in your business or financial life, head over to vital strategies.com/questions.
And submit a question to us. We’ll review the questions that come in and answer some of those in upcoming episodes. Again, that’s vital strategies.com/questions. Now, let’s jump back into today’s episode.
Ashley: Quick,
Patrick: I’d like you to maybe spend a little more time about what you just talked about, ’cause I think that’s a, another fantastic opportunity for people is. Hey, I’ve got some cash. I’m, I’m, I wanna make an investment. I wanna be more passive in my, my role here. And, and I, I think there’s, I think there’s some big institutional players out there.
I’ve never been too excited about those opportunities and so I, I’ve always been more interested in like, how can you sort of put my, my dollars right next to, uh, the guy that’s running the [00:36:00] deal who has Simone. His own capital invested. Sure. And we can sort of enjoy, you know, the upside together. And I know the operator and he is doing well.
So can you, can you tell us a little bit more about how those, those deals come together?
Ashley: Sure, absolutely. So you set up your captive opportunity fund. Mm-hmm. You defer into it, and this is the case for anybody that wants to go into a institutional deal. So we’ve had this happen on, uh, a regular occasion with an oil and gas sponsor.
Mm-hmm. They’re talking with somebody that’s got $30 million worth of gain. They don’t wanna put all $30 million into just oil and gas. Yeah. So they’re not a candidate to just go into that fund. So we set ’em up a captive fund. They then go put $5 million into that oil and gas deal at the deal level. And then we’ve got relationships with great developers and sponsors mm-hmm.
That are doing OZ deals. They’re actually out there raising retail money within that fund. And so there’s a fair amount of [00:37:00] brain damage with raising money in 102 hundred $50,000 increments.
Patrick: Sure.
Ashley: Yeah. And so if they could get, if they can get a seven figure check, then they’re willing to cut, you know, additional incentives to that seven figure check writer.
Mm-hmm. And so we are kind of that. We’re that bridge between the two of those where we’ve got vetted providers that are interested in doing that, and we’ve got the capital. And the reason why we have that is ’cause we have relationships with the capital sources that are looking for that. And so we go to ’em and we’re like, Hey, listen man, I got somebody that could deploy up to 5 million bucks, close out your deal.
Like what kind of, what kind of vi can you gimme on that out of the sponsor promote? And they’re like, mm-hmm. Hey, let me sharpen my pencil and let me get back to you. And so then we bridge that gap. We help the captive, you know, fund to make sure they’re in compliance. We basically become their fund manager, right?
Mm-hmm. Running all of their stuff. And then we help them supervise, number one, the investment, number two, the documentation, and then number [00:38:00] three, that the sponsors actually doing all of the stuff that they need to do in order to stay opportunities on compliant.
Patrick: Yeah. And, and I think one thing you’re highlighting here that is, uh, something we regularly talk about with our clients is.
Find a who in your life that knows how to do things versus go figure out how to do it on your own. And I
Ashley: unquestionably,
Patrick: I’m, I’m hearing you. Uh, we, we just feel like we should stay in our lane and lean into our unique ability. And then let’s, let’s go find expertise in the areas that we, we needed. And, and what you’re talking about here, I think is
Ashley: we got Bob Bodine, we got Strategic Coach going there, man, we got all kind.
We’re channeling all kinds of stuff here today. It’s awesome.
Patrick: Uh, this is good. And Ashley, you’re so well read. It’s like any reference I make, you’re like, I know exactly where that came from. Uh, this is, uh, this is good. It’s fun. I love strategic work. Well,
Ashley: once again, dude, like we need to, how tall are you?
Are you like, uh, ’cause I’m six eight, maybe we, uh, maybe we’ve got some, you know, common lineage there.
Patrick: Yeah, I’m, I’m six four, so I don’t [00:39:00] know. I’m, uh, I’m up there. I’m not, not as tall as you, but, uh,
Ashley: well, my brothers are six four. I got one that’s 6 4 1. That’s six five. They felt like they got cheated. My dad was seven foot and I was like, Hey man, we all got cheated.
Patrick: Yeah, absolutely. But, uh, maybe we can get the old man basketball team together and uh, go out there and still, I tell
Ashley: you what, man, like, uh, I, I used to foul people. Now I really have to foul people. Yeah.
Patrick: I, I got out and played with some 20 somethings the other day and I’m like, you’re old enough to be my child.
But, uh, you know how you
Ashley: hung, dude,
Patrick: that’s
Ashley: impressive.
Patrick: I was sore. I was really sore. I
Ashley: bet
Patrick: my brain says I could still do it. My body, it’s not so sure. But yeah,
Ashley: unfortunately
Patrick: I do
Ashley: that same thing.
Patrick: Okay. Sorry. Uh, I, I, let’s, let’s, uh, let’s get back on who not how, right? Sure. We are, we are looking for who’s in our lives, not, uh, not figuring out how to do it.
And, and I just. I think about all of the things you, you just talked through and anybody that has a capital gain opportunity should call you. [00:40:00] Like, I can’t imagine a scenario why that wouldn’t make sense to just start a conversation and go, all right, uh, Ashley, let’s, let’s talk through, uh, with you or somebody on your team.
Sure. What opportunities are available to me? Because I just look at the flexibility, the, the, the leverage. Like people also don’t understand the, uh, the compounding. Impact of taking the tax outta the equation. Uh, we’ve, we’ve talked about this before, but you know, if you, if you take a penny and double it every day, uh, I think by the end of 31 days you have like $15 million.
It’s a, it’s a staggering number. It’s insane. Yeah. If you apply the 37% tax rate to that, that doubling, you have like 14,000 or 12,000 or some, some, some number like that. It’s like, uh, don’t let taxes erode your wealth building. Um, sure. Like, uh, lean into these opportunities and, uh. Uh, there’s, there’s just so many things that we’ve talked about that are just blowing my mind.
Ashley: So it’s interesting that you mentioned that. Right. Because, um, I think that one of the things that Opportunity [00:41:00] Zones has started to do is, and certainly the family offices that I work with, this is really resonating with them mm-hmm. Is that they are really, really honed in on tax drag, but they’re also starting to understand transactional drag.
And so they’re starting to understand the transactional drag associated with a three to five year hold on real estate assets and or business assets, and how much is involved with both paying the taxes on that, but then also paying all of the professionals that are associated with a deal every three to five years.
And then, oh, hey, by the way, every three to five years I’ve gotta go find a new deal. And so if they’ve got the ability to be able to stick something into. You know a really good deal. Do all of their due diligence, find the really best operator, and then say, hey. I’m gonna leave this money with you for 10 years, potentially even 30 years.
Man. When you talk about what is able to happen there, it’s unbelievable.
Patrick: Yeah, yeah, [00:42:00] yeah. And I think you’re highlighting a really interesting point. I I, I wanna make a, a look back at a 10 31 exchange for a second. You know, when I do a 10 31 exchange, the problem with that is everybody knows I’m doing a 10 31 exchange.
I have a limited amount of time, and, and I’m screwed when I’m negotiating that deal. ’cause they’re like. Nope, not doing it right. Like, I understand the time pressure you’re under. If you wanna do this deal, pay the price. And so I don’t have any of that time pressure when I’m looking at, uh, I, I, I still have some time pressure, but I don’t have, I, it
Ashley: not a 43 months
Patrick: price.
Ashley: I mean okay, if you can’t do, if you can’t do it inside of 43 months, we gotta talk.
Patrick: Yes. No, absolutely.
Ashley: So, well, I, you know, you, you also bring up another point, right? That we solve a lot of failed 10 30 ones with oz’s. Mm-hmm. Yeah. So when somebody either fails to designate or their money, they, they’re not unable to close or they’re [00:43:00] unable to close on a portion of it, and normally that would come out to them as boot.
Mm-hmm. We can kick that into a fund and we can get the deferral and we can get all of the OZ benefits for that. And their 180 days starts when they get the money back from the qi.
Patrick: Yeah,
Ashley: so we actually are using that as one of the 1.0 to 2.0, uh, transition. And kind of that straddle, uh, option is that if somebody’s selling a real estate asset that they own individually put the money with a qi because that now gives you 180 days.
That gets us past July 1st, and now you can put it into 2.0 if you wanted to put it into 2.0.
Patrick: Nice. And a qualified intermediary is a qi on the 10, 10 31. Sorry. Yeah. Yeah. No, this is just, uh, this is good. It’s, it’s fun to like nerd out with somebody on these things. So, uh, yeah, it, it’s cool to see that, you know, I, I, I love leveraging the opportunities out there and not that you’re, uh, abusing anything, but now I’m, I’m taking advantage of the 10 31 rules and the [00:44:00] opportunity zone rules to.
Uh, get me into a new regime, which, you know, I can benefit from. So I think that, uh, um, that’s fantastic. I actually, I wanna go back for just a second and talk about, ’cause I’m not, I’m, I’m, I’m trying to process all this, this, this stuff you’re given to me about opportunity zones. Can we talk a little bit more about the, the, I’ll call it the captive and how I can sort of pick and choose my investment opportunities inside of there?
I, I just wanna understand that maybe, um. A little bit better ’cause it’s, it’s a little fuzzy for me right now how, how all that comes together.
Ashley: Sure. So inside of your fund, right. You gotta get it into a fund inside of 180 days. We talked about that a fund can be simple as an LLC tax, as a partnership.
Mm-hmm. So when you get it into the fund, you have between six months and a year before you have to have 90% of your money into qualified opportunities on business property. You can either invest directly into real estate that’s in an opportunity zone, [00:45:00] or you can invest through what we call a qualified opportunity zone business.
And so you can invest into that actual LLC. Got it. And qualified opportunity zone business is once again, just a, it’s either a partnership or a corporation. Mm-hmm. That’s got 70% of its assets, this qualified opportunity zone business property, and it’s earning 50% of its income from something that’s happening in the zone.
Yeah. That doesn’t have to be a new deal. You could take your money and you could put it into an older opportunity zone business. So we’re actually doing a bunch of this right now. I’ve got, uh, one of the things that I help people allocate into is a distressed fund. And so they then they take their new cash and they put it into an existing multifamily deal that may have some constraints relative to the, uh, to the financing that they got.
Mm-hmm. Back in 20 21, 20 22. It’s a completed deal that’s generating cash flow so they know what the vacancy rates are, they know how it’s performing, [00:46:00] but it could be dragging their cash based upon the interest rate buy downs or the other stuff that they gotta pay. Mm-hmm. So they can now bring that money in and as long as they’re paying off debt to where it’s not transferring out to another party, that’s totally kosher.
That absolutely works. Or. You’ve got, uh, a professional fund manager. So I’ve got one that’s building Build to rents right now, and they’ve got, uh, uh, they’ve got A-Q-O-Z-B that’s building a thousand of them. And so they need, they’re actually raising money. And so they are, they are open and willing to raise capital from existing QO Qfs, right?
Because they want to be able to take money from other established qfs out there. Like, uh, you know, there’s a number of different funds that are professionally managed. That, you know, they’re actually deploying into other people’s deals. The one that comes that hops off the table to me is Aus. So they’re like, Hey, we wanna make this available to Aus because they could write us a [00:47:00] $10 million check.
And so they set it up so that they can accommodate funds from other funds that are out there. And so that then applies to you as well. And based upon how much money you’re bringing to the table, there’s an amount inside of that. Sponsor promote. That’s inside of every deal that’s specifically reserved and allocated to raising money.
Mm-hmm. Now, it depends on who the sponsor is about how much that is, but because of that, we can then go have a conversation with ’em to say, okay, if you don’t have to go do that, and we’re gonna bring a sizable check, how much could we, you know, how much could we get grossed up inside of this deal? Mm-hmm.
Sure. And so they will gross you up and, hey, guess what? You’ve just gotten an offer at better terms, right? Yep. So it’s not like you got an extra like kicker right. Of cash mm-hmm. That came to you under the table or anything. Yeah. You just got a better rate on your investment. Guess what? Yeah. When that comes back to you, it comes all out tax free.
Patrick: Yeah, [00:48:00] yeah, yeah. No, that’s, uh, that is fantastic. Um, so you, you brought up debt as well ’cause that’s another constraint with 10 31 exchange, right? I, I’ve got debt replacement and, yeah. There’s limitations there. And so none of that exists over here on the opportunity zone, right? Like, I’m just taking my, my proceeds and I can invest either, uh, in a, in a project, pay a hundred percent cash for it, or I can, uh, how does debt work in the equation?
Yep.
Ashley: Yeah. So if you get legit third party debt, you can lever up as much as they’ll allow you to do so. Now, I mean, I don’t know that there’s anybody out there loaning more than 90%. Sure. But we generally tell people that, hey, listen, you wanna keep your deal at least 10% capital gains equity.
Patrick: Mm-hmm.
Ashley: And by the way, you can be the lender on the deal.
So if you’ve got a million dollars worth of capital gains, but you’re doing a $10 million deal and you need to loan the other $9 million into it while you go out and, you know, get the thing built, get it stabilized, or do [00:49:00] whatever it is that you gotta do, then you’re good to go. And then, oh hey, by the way.
After two years, you can bring in other debt and you can completely refinance every dollar that you put into that deal out. And if it’s a, if it’s a two year refinance lockout, so after two years, you can suck every dollar out of that deal and there’s no taxable effect.
Patrick: So let, let’s go back to and put some dollars to that.
So I did a $10 million deal. I brought a million dollars of capital gain, $9 million of my, we’ll call it own cash into that scenario.
Ashley: Yep.
Patrick: I. Fix the operations, the thing’s now worth $15 million. Are you saying I can refinance out all $10 million?
Ashley: You could. So let’s say it’s worth $15 million and you’re gonna get, uh, 80%, right?
Patrick: Yeah. Yeah.
Ashley: Um, you know, you could take out that cash. I can’t do 80% times 15 in I head, but Right. I, whatever. It’s
Patrick: 12 million. Yep. Yep. So, so
Ashley: you could pull $12 million out of it, and there’s, as long as you wait two years from when you put your money into the [00:50:00] QOF. Not when you put your money into the QOZB.
Patrick: Yep,
Ashley: sure. You, you pay no taxes.
Patrick: Nice. So I’m, I’m gonna, uh, actually you’re melting my brain on all the opportunities here. So, uh, the cool thing about refinancing is that’s not a taxable event. That’s right. So I just, I just pulled $12 million out. Uh, I can go do whatever I want to add whatever you want
Ashley: to with it.
Patrick: Now I haven’t, um, I still am, I have to be mindful of the fact that there’s still potentially some tax going to be due on my. My million dollars, original million dollars. Right. Based upon
Ashley: when that’s due. Correct. Yep. You’re gonna have to pay that.
Patrick: Right. So, but man, if I have a game plan for that, but that’s, that’s incredible.
Like, uh, I, I just was able to, to leverage the opportunity zone, leverage some financing, leverage the fact that refinanced dollars are not taxable. Um. This is, um, is
Ashley: also no, there’s no related party issues either. Right. Relative to that, there are related party issues about how you generate your capital [00:51:00] gain.
So you can’t sell that hand Turkey you made in kindergarten to your mom for a million bucks and use that capital gain.
Patrick: Sure.
Ashley: Right. So that’s the first one. The second one is that you can’t buy party, you can’t buy real estate or like assets from a related party. Yep. So if you own property inside of an opportunity zone.
There’s ways that we can, that we can get creative with it. But you couldn’t sell that into a new entity and be able to do that. Right. I mean, we can, we can usually work around it, particularly if it’s raw land. Sure. But you gotta be careful, uh, if you own property prior to when it was designated.
Patrick: Yeah.
Yeah. So effectively it needs to be a third party transaction is the, uh, it sounds like there might be some ways around that, but, uh, that that’d be the safe way to go. So
Ashley: that’s the safest way to go, but
Patrick: yeah.
Ashley: I mean, if you’ve got, so one of the challenges with opportunities ends, and I’ll put this out there, is that most development deals get done with a land lift.
Mm-hmm. So you got somebody that owns dirt, they, somebody comes to ’em and they’re like, Hey, [00:52:00] listen, I’ll buy it for a million dollars, or I’ll give you a 20% carry inside of the deal and it’s gonna be worth 10 million bucks When we develop it and they’re like, wow, I can make 2 million instead of 1 million, and I don’t have to pay taxes until I get it.
They’re like, oh, I’m in. The problem is you can’t do that in an opportunity zone transaction. You actually have to purchase the land, otherwise it becomes a bad deal. It becomes a bad asset. And so we’ve got mechanisms, right, with a third party ground lease company where that company can come in and buy the land and then ground, lease it back to the QOZB, and then you can buy it back after two years.
But you gotta get creative like that if you’re gonna, if you’re gonna be doing a transaction like you would normally do. There’s nuances to opportunity zones. Mm-hmm. Usually not insolvable, but there’s nuances and you better know, like your, whoever your professionals are, better know what they’re doing.
Patrick: Yep. Yep. Man. Okay. I, I, I feel like we could run all day and be talking about all of the tax [00:53:00] opportunities. Um, so here’s a few things I, I wanna point people to OZ pros.com. Um, and Ashley, what I, I know you’ve created some, uh. Some special assets for a landing page for, for people listening to the show. Can you walk us through, uh, that and, and what people will experience when they go there?
Ashley: Yeah. I know that you, you know, that your listeners are probably looking at how they can improve their after-tax returns, and so my team specifically put together a podcast listener, uh, starter. And the show notes have a link to a landing page that’s specifically for your, uh, guests.
Patrick: Yep.
Ashley: If you’re listening and you’re listening to this where you can’t actually pull the show notes up, if you go to ozi pros.com/podcast, you’re gonna be able to pull it up there and it’s got a 15 minute masterclass, uh, you know, kind of a plain English guide relative to how to do oz’s that you could share with your CPA or partners.
I got my, uh, my trademarked opportunity zone cheat sheet that’s in there. Yeah. It’s, [00:54:00] uh, basically opportunity zones on a page, and then we also have the map that I was talking about where you can find where the OZ, uh, opportunity zones are in your area.
Patrick: Yeah, I, I have to admit, I’ve, um, I’ve signed up and I’m working my way through, um, all of that content and it’s, it’s good stuff.
So, uh, I’m just excited about. Adding Oz, uh, opportunity zones to the toolkit that we offer to our clients. And just being able to connect with you and your team, uh, Ashley, to be able to, um, just, just execute on this. ’cause I, I’m just seeing so many opportunities here for, for people that are having capital gains that, uh, we need to mitigate the tax.
And, uh, I, I think this is something that. Is, it’s got a level of complexity that makes it just challenging enough for people to go, I don’t know, I don’t know how to do that. I dunno what to do with it. Sure. And, and what you’re doing here is, uh, removing all of that friction and allowing people to just continue to accelerate their wealth.
So, um, [00:55:00] this is this good stuff. Yeah. Can we to make
Ashley: that as painless as possible. So we’ve got a number of different ways that you can interact. So like I said, we could set up your QOF or QZB. Um, we’ve also got a masterclass. And, uh, that’s, it meets weekly. It’s the only, uh, masterclass out there on Opportunity zones.
It’s a weekly deal and we really deep dive into the nuances of it, and so we can flush out really fast whether somebody’s strategy or something that they’re potentially thinking about will work. The great thing is too, is. Most people don’t know what they don’t know. And so by coming in there, they can get other ideas from other people’s questions and look at other deals that other people are doing.
And I, you know, I, we’ve, we’ve got, we’ve gotten great results and great feedback from people that are inside of our masterclass.
Patrick: Yeah. Yeah. This is, this is awesome. And, and I think about the stakes that we’re, we’re looking at here. You know, if, if a listener is, is listening to this and they’re like. Not taking action, you know, thinking about losing a large [00:56:00] percentage, 30% or more, uh, to capital gains tax just makes anyone cry, right?
I, I just look at the entrepreneur drives this country forward and we should keep as many dollars in their hands as possible. Um, and by not taking action, you’re missing out on some, some opportunities, some time sensitive opportunities. You know, there’s so much flexibility in the opportunity zone, but you still have to do something Sure.
Before the clock runs out. And then you hate to end up in a rushed investment decision after liquidity events or even before liquidity events. So, so taking proactive approach if you think you’ve got a transaction happening, the time to start is not, not right when the transaction taking
Ashley: 179 days afterwards,
Patrick: right?
It’s a year, two or three ahead of time. Getting understanding of what’s out there for us, uh, getting a plan together. I think all of that is, is great. And, and if we. If we don’t, you know, we’re just failing to position our wealth for generational impact and, uh, uh, we just hate to see decades of value creation shrink [00:57:00] dramatically due to poor planning.
So,
Ashley: sure.
Patrick: We, we, we think of the flip side of that, right? The, the, the entrepreneur that takes action preserves significantly more of their gains or all of their gains. They get to reinvest capital, strategically build long-term tax efficient wealth, align their investment decisions with. I’ll say community and legacy impact.
Like, that’s, that’s a fantastic thing with, um, these opportunity zones. And then they really get to transform a, a taxable liquidity event into a, just a powerful wealth building and legacy building opportunity. So, uh, actually, I just appreciate you creating this opportunity for people to, uh, to pay less tax, build more wealth, and, uh, ultimately live a great life at the end of the day.
So thank you so much for joining us here today and sharing all of your wisdom and insight. This has been, uh. This has been awesome.
Ashley: Well, thanks for having me, Patrick. It’s an honor and a privilege, like I said before, and, uh, it’s been, it’s been a fun interaction and looking forward to. Seeing what that holds and
Patrick: Yeah.
Ashley: Um, you know, hopefully I won’t value you too much when we actually do get a chance to play [00:58:00] basketball together.
Patrick: It sounds like a plan. Thank you,
Ashley: brother. Yeah, man.
Patrick: Thanks for tuning into this episode of the Vital Wealth Strategies Podcast. I hope you found value in today’s conversation with Ashley. And walked away with a few ideas you can apply in your business or investing strategy.
If this episode helped you think differently about tax strategy, capital gains, or opportunity zones, share it with someone who could benefit from hearing it. A lot of entrepreneurs are navigating these decisions and sometimes the right conversation at the right time. It can make a big difference. And before we go, make sure you visit vital wealth.com/resources.
We’ve built a vault of tools, guides, and insights designed to help entrepreneurs minimize taxes, build wealth, and make smarter financial decisions. Again, that’s vital wealth.com/resources. Take some time to explore because there’s a lot that can help you take the next step in your strategy. Also, if you enjoy the podcast, I’d really appreciate it if you left us a review.
It helps more entrepreneurs discover the show and allows us to keep bringing more valuable conversations like the [00:59:00] one you heard today. And one more reminder, you can always find our growing library of resources@vitalwealth.com slash resources. And remember, you’re a vital entrepreneur. You’re vital because you’re the backbone of our economy, creating opportunities, driving growth, and making an impact.
You’re vital to your family creating abundance in every aspect of life. You’re vital to me because you’re committed to growing your wealth, leading with purpose, and creating something truly great. Thank you for being a part of this incredible community of vital entrepreneurs. I appreciate you and I look forward to having you back here next week on the Vital Wealth Strategies Podcast, where we help entrepreneurs minimize their taxes, master wealth, and optimize their lives.