Our vision for the Chestnut Opportunity Zone Fund reflects our desire to help cultivate a more diverse, equitable, sustainable, and connected future for all communities. We know achieving positive change requires intention and collaboration, partnerships and patience. It requires stewardship of relationships and resources. This is the spirit of our work together to align capital with projects that meet communities’ needs and sow seeds that yield social and financial returns. Chestnut Funds and Chestnut Catalyst have come together to plant seeds of change and hope that you will join us.
Steen Watson, Managing Partner Liza Soydan, Partner
Courtney Watson, Partner
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OPPORTUNITY ZONE FUNDS
seeds of change start here
We are focused on Opportunity Zone real estate projects, collaborative partnerships, and coordinated capital as a platform to create change in the areas of:
ACCESSIBLE & QUALITY JOB CREATION
ACCESS TO COMMUNITY & COMMERCIAL GOODS/SERVICES
ENVIRONMENTAL STEWARDSHIP
CATALYTIC
IMPACT
HOW IT WORKS
Opportunity Zones were established by Congress in the 2017 Tax Cuts and Jobs Act as an innovative approach to spur long-term private sector investments in low-income communities nationwide. The Opportunity Zone investment tool allows private investors to receive tax benefits by reinvesting capital gains into a Qualified Opportunity Fund (QOF) that in turn makes qualified investments in real estate or businesses located in distressed communities nationwide.
Deferral of Gain
Temporarily defer invested capital gains until date QOF investment is sold or December 31, 2026, whichever is earlier.
Step-Up in Basis
Original investment's tax basis increases by 10% after 5 years and by 15% after 7 years.
Permanent Exclusion
After 10 years, permanently exclude capital gains on any appreciation of the QOF investment.
*Benefits vary depending on duration of investment. Per draft Treasury guidance and the guideline update in October 2018, investments in a QOF must be made by 12/31/19 to be eligible for the 15% step up in basis for holding 7 years or by 12/31/21 to be eligible for the 10% step up in basis for holding 5 years. Per draft Treasury guidance, a QOF investment made before the Qualified Opportunity Zone's designation expiration and held for 10 years or more years can qualify for permanent capital gains exclusion through 12/31/47. This is not tax advice. You should consult with your tax advisor.
TARGET MARKETS
We look to communities in which Chestnut Funds has existing relationships with strong operating partners to help understand local market dynamics, source real estate opportunities, and execute for success. We then expand upon that understanding to ensure that projects have the potential to catalyze impact and also provide both financial and social returns.
