How to use tax loopholes to get deals done
June 30, 2023
by a searcher from Duke University in Austin, TX, USA
Hi Everyone,
About once a month or so I am contacted by an entrepreneur who just had an 8-10 figure liquidity event and finds me through my article on opportunity zone businesses that went viral on Hackernews last year. If you aren't familiar, opportunity zones let investors legally avoid capital gains tax.
The article is the only one on the web that goes into depth on how to use opportunity zones as a tax loophole for true businesses (rather than just real estate), and the entrepreneurs who contact me always want one of two things:
1) "I want to create another business and structure it as an OZ business to lower my tax bill."
2) "I like the idea of lower taxes and I like the idea of doing it by investing into actual businesses rather than real estate, but I don't want to start another company myself right now."
The first one I can help with, but the second one I cannot since very few investment-worthy businesses are set up to qualify as OZ businesses, even though they could be. That's an opportunity for searchers -- OZ businesses are a scarce resource that certain investors really want to invest in but can't find.
Would any searchers be interested in a virtual meetup where I go through what it takes to qualify a business you acquire as an opportunity zone business?
Additionally, a lot of PE firms and investors are finding it hard to get deals done right now at relatively high interest rates. One way to boost the value of an existing portfolio company is by converting it into an OZ business which is inherently more valuable to certain buyers who care a lot about tax. Would any search fund investors be interested in a virtual meetup where I talk about how to do this?
from New York University in New York, NY, USA
from Northwestern University in San Mateo, CA, USA