How Trump Will Reshape Opportunity Zones, With Ashley Tison

Donald Trump has won a second Presidential term. And with control of the Senate and House, tax legislation in 2025 looks very likely to extend and possibly renew Opportunity Zones.

Mr. Ashley Tison of OZPros joins the show from the site of the Novogradac 2024 OZ Summit in Washington DC to discuss the election outcome and timing of potentially sweeping Opportunity Zone reform in 2025.

Episode Highlights

  • The pause in capital markets during election season, and how investment activity may now increase with certainty in the election outcome, which looks like not just a second term for Trump, but also a Republican sweep in Congress.
  • A quick recap of the “OZ 1.5” panel that Jimmy spoke on at the conference.
  • What to expect from Congress during the “Super Bowl of Tax” in 2025.
  • Takeaways from the OZ Insiders meetup and dinner in Washington DC, and what we’ve learned at the Novogradac conference so far.
  • How Opportunity Zones may be reformed and extended by at least two years during a budget reconciliation process in Washington DC in the second half of next year.

Guest: Ashley Tison, OZPros

Featured On This Episode

About The Opportunity Zones Podcast

Hosted by OpportunityZones.com founder Jimmy Atkinson, The Opportunity Zones Podcast features guest interviews from fund managers, advisors, policymakers, tax professionals, and other foremost experts in the Opportunity Zones industry.

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Show Transcript

Jimmy: Welcome to the “Opportunity Zones Podcast.” I’m your host, Jimmy Atkinson. I’m coming to you on site, in our nation’s capital, Washington, D.C., at the beautiful Fairmont Hotel, in the Georgetown neighborhood of Washington, D.C. And we are at the Novogradac 2024 Opportunity Zones Summit. And it is the day after election day, Ashley, and…

Ashley: Big night, big night.

Jimmy: …it was a huge night. Trump has won the White House, his second presidential term. The Republicans have secured the Senate, and we’re very close, it looks like, the Republicans securing the House as well. So that’s been all of the talk of the event here today. Really lively atmosphere here. A renewed sense of hope, I guess, and a really bright future for Opportunity Zones, based on the election results last night. Ashley, what did you think of the election outcome?

Ashley: Well, it was interesting, and it’s interesting how much people have kind of put things on pause prior to the election, notwithstanding whoever they were kind of pulling for. And it’s interesting that today, it’s like people are ready to move forward, notwithstanding whether they were excited about the election results, or disappointed with the election results, they’re like, “You know what, we’re glad it’s over. Let’s move on.” And I think that you can see that in the stock market, and you can also see that in the crypto markets. And certainly, the level of kind of excitement here at the conference is also one that’s very ebullient, and is very excited about kind of the future of Opportunity Zones.

Quite frankly, I think that we had a little bit of ICU, where we were on life support there, kind of coming out of the summer and doldrums, and that kind of thing, where I was getting all this questions, “Well, aren’t Opportunity Zones dead? Hasn’t that timed out?” And I hope that this kind of puts it back in front of people that, hey, this program is not dead. It’s still extremely viable. And we’ve got, I think, a really solid chance for a second wind on an extension, and some other really kind of cool things that you guys were talking about in the panel of Opportunity Zones 2.0, or I guess 1.5.

Jimmy: That’s right. Yeah, we’ve been talking about, I just got off of my panel with some other panelists up there, and we talked about what is going to happen now, following this election result. It looks very likely the Republicans have swept the White House, the Senate, and the House of Representatives. What is that gonna mean for tax legislation moving forward into next year? 2025 is gonna be the Super Bowl of tax, because it’s the year that a lot of the Tax Cuts and Jobs Act expires. And without extension or renewal of a lot of those provisions, the tax rate’s gonna go up for nearly two-thirds of American households, starting in 2026. So, I don’t think the Republicans are gonna let that happen. I do think there’s, it’s very likely that the TCJA will get renewed, if not in its entirely, at least most of it will, I think.

Ashley: Some sort of form, yeah.

Jimmy: And certainly, that bodes well for Opportunity Zones. You know, just 24 hours ago, I wasn’t sure about the future of Opportunity Zones, and now I can say, with a lot of confidence, it’s very likely that Opportunity Zones will get extended at the end of the year. So, by the way, I forgot to introduce you, but for anybody who’s not aware, Mr. Ashley Tison, he’s been on my podcast numerous times. He’s the founder, CEO of OZPros. Ashley, maybe you can tell us a little bit about who you are, what you do, in case any of my audiences is not familiar with you.

Ashley: Well, I like to call myself a reformed attorney, because I got out of practicing because I wanted to get in the game. We focus on helping business owners keep more of what they make, Opportunity Zones being one of the strategies that we use to do that. And it’s been an excellent one. I think it’s the greatest tax incentive ever legislatively created. And we specifically went about trying to put Wall Street-level sophistication in the form of that tax incentive, and in form of the documents, into the hands of Main Street America, which are the backbone of our economy. And I think that we’ve successfully done that. We’ve created over a thousand Opportunity Zone entities. And we help people strategize about what they wanna do, whether it’s a captive deal. We help them look at different funds, if they wanna go into a professionally-managed fund, as, into their QOZB. And then we help them keep track of it and build their audit trail, to make sure that they’ve got that tight. Because the greatest thing about the Opportunity Zone program is that you don’t have to ask for permission, but you better have a darn good audit trail. And so, that’s what we do at OZPros.

Jimmy: That’s excellent. Yeah. And Ashley has helped hundreds, if not thousands of individuals and families take advantage of the Opportunity Zone incentive, and looks like we’ve got a lot more runway yet to go with this.

Ashley: Tell you what. It’s great to have. Great to have some runway.

Jimmy: Absolutely. So, I mentioned we’re at the Novogradac OZ Summit. It says so right here on the table. opportunityzones.com is one of the sponsors.

Ashley: So, we’re taking the pillows. We’re taking the pillows from here. The question is, how are you gonna get this in your carry-on?

Jimmy: I don’t know if I’m gonna fit this in my suitcase. But Ashley, what have been some of your takeaways so far from the conference? Because we’ve had breakfast.

Ashley: I could probably get this in my truck.

Jimmy: Maybe. We’ve had breakfast, we’ve had lunch, a couple networking opportunities here. We had our OZ Insiders mastermind group dinner last night, too…

Ashley: That was awesome.

Jimmy: …just around the corner. We had a great attendance there. About 20 people showed up. What were your thoughts of the group there last night, at that OZ Insiders dinner?

Ashley: What was interesting how, even at the OZ Insiders dinner, it was great to see everybody again, first and foremost. And I think that’s what’s really cool about Opportunity Zones, is that we’ve kind of become this weird family. And it’s great to get back together in person. Right? We had that big stretch during COVID where we couldn’t do that. And now, it was great to see everybody. But I think that everybody was a little bit reserved last night. Everybody was kind of hedging, like, “Well, we think that this is gonna go one way,” but wasn’t really sure. And so the difference between last night and this morning is literally night and day. And so, notwithstanding the salmon that was excellent there, by the way, great choice on the restaurant, everybody was kind of like, “Okay, well, let’s wait and see.” And I went to bed right after dinner. It was kind of like, you know what, I’m not gonna stay up all night checking these out. And then woke up to what was a massive spike in Bitcoin, massive surge in the market, and other really kind of hopeful things that people are excited about. And so, I think that that’s the great thing that we’re seeing, is we’re seeing people running back to getting these Opportunity Funds started, because this program is not dead. It’s certainly alive, probably going to get extended.

But even if it doesn’t, it represents an opportunity. Haha, see what I did there? To get in on the greatest tax mitigation hedge that is out there. Because the big benefit of the Opportunity Zone program is that 10-year step up in basis, but, you gotta have a QOF to play. You gotta have a capital gain to play. Now, hopefully, as you guys talked about, we’re gonna see, potentially, some of those things change, in potential legislation. But, if you really wanna be well-poised to take advantage of that, you need to get in the game now. You need to get your 10-year clock started, because that fund, after your investment turns 10 years old, becomes an unbelievable tool for how you can take any capital asset, and turn it into, certainly, if it’s in an Opportunity Zone, and turn it into something that’s gonna get a step-up in basis to fair market value.

Jimmy: And that’s what it’s all about. So, yeah. Great dinner last night. We did have CNN on the TV, so we were watching the election returns come in. And before we left, I don’t know, we were there from about 7 to 9:30 or so, and by 9:30, it looked like it was falling…

Ashley: Headed in that direction.

Jimmy: …in that direction. And then I stayed up for a few more hours watching. I fell asleep watching TV, and it looked good for the Republican Party as I drifted off to sleep last night. And certainly, regardless of your political leanings, just speaking matter-of-factly now, the results of the election last night, what looks like a Republican sweep, is certainly the most favorable outcome for the purposes of getting the Opportunity Zones provision, or Opportunity Zones tax policy extended, and potentially made permanent at some point in time. So, Ashley, we’ve had a couple of panels, back behind us here already. We had Mike Novogradac lead the first one, with some Capitol Hill staffers. Great panel, really showing us what’s going on on Capitol Hill, what everybody’s thinking. And then my panel that I just had with Jason Watkins and a few others up there, talking about OZ extension. What have been some of your takeaways so far from the first couple panels of the day here? And what are you looking forward to the rest of this week here?

Ashley: Yeah. So, I think that the biggest takeaway from the beginning one about the D.C. play is that it will depend on whether the Republicans take Congress, and take the House.

Jimmy: And right now, by the way, just as of this moment when we’re recording this, which is at, let’s see, about 2:45…what does that say, 2:45 p.m. Eastern Time, the day after the election, Polymarket is giving the Republicans a 98% chance of taking the House. So, it looks all but certain. There are some races still pending there. They have already called it for the Senate, and obviously they’ve called it for President Trump. But go on.

Ashley: Yeah. So, if that happens, that, more than likely, an extension would happen as part of a reconciliation, and that that’s likely to probably be in the summer/early fall of 2025. I love that comment. I love that line about that 2025 is gonna be the Super Bowl for taxes. And so, as you’re going into that, right, that there’s gonna be lots of things that are gonna happen there. And one of my other takeaways is that there’s a huge focus on rural benefit, and that that’s gonna be a massive focus on any legislation that we see, is I think gonna extend the program in some way, shape, or form, to where we’re highlighting and we’re really getting, you know, we’re trying to provide extra benefit for rural areas. So, keep track of that. And then kind of the follow-on on that was that more than likely, we’ll probably end up seeing that Opportunity Zone Dynamism Fund, and, you know, significant capital for state and local governments to be able to take advantage of Opportunity Zones.

And the way that we’ve seen those dollars be spent historically is in helping small to mid-sized businesses really kind of take advantage of the Opportunity Zone program, which is near and dear to our heart. And so, we love that, and we love the fact that that will be out there for people to be able to, you know, talk to their local representatives, and to be able to meet with their governors and their departments of commerce, and really kind of figure out what the plan is for how those dollars are gonna get spent, because that could be the difference for a, you know, first-time sponsor, or for a Opportunity Zone business that’s trying to raise capital, to be able to get their pitch deck together, to be able to get the, you know, their securities offering-type stuff done, and to be able to really take advantage of the program. And so, I think that all of those are really exciting things, that would happen in the form of, you know, an extension of the Opportunity Zone program.

Jimmy: Yeah, a lot of great ideas, in terms of extending the Opportunity Zone program, that Community and Dynamism Fund being one of them, some additional support for rural Opportunity Zones. Looking forward to a potential reauthorization of Opportunity Zones, or maybe an Opportunity Zones 2.0, when we talk about that, that goes beyond this two-year extension, Opportunity Zones Transparency Extension and Improvement Act, that we’ve been talking on this podcast about for the last three or four years now. But we’re talking about potentially, as soon as the end of next year, introducing an Opportunity Zone 2.0 platform, whereby the governors would get to designate new census tracts as Opportunity Zones, using the 2020 Census Map. And some tweaks to the program there that I thought were interesting was, one, potentially allowing for after-tax, non-capital gains dollars, to participate, and still…

Ashley: Which would be big.

Jimmy: Yeah. And still take advantage of that 10-year exclusion provision. And then, but what else? What else?

Ashley: You know, I think that they’re also potentially gonna make some other incentives for other types of things that they want to incentivize, specifically affordable housing. Like I said, the rural piece, and, you know, creating special incentives for folks that are going into rural areas, potentially making this permanent, to where the governors could get the ability to redesignate zones, like, every 10 years. I think that people need to pay particular attention to how that process happens, and then what, you know, what kind of input they can have in, you know, figuring out how the governors are gonna go about doing that. Because I think that that’ll, you know, that’s a big deal.

Jimmy: And when it first rolled out, by the way, when the Tax Cuts and Jobs Act was enacted, signed into law by President Trump in December of 2017, it was a very quick period of time whereby the governors of each state had to nominate census tracts to the Treasury. All of those census tract designations were done between late December and July.

Ashley: It was, like, four months.

Jimmy: Yeah, a lot of them got their designations in, earlier, in April, but I think it was finalized in July. But that was a very quick period of time. A lot of governors and their staffs didn’t know what Opportunity Zones were, hadn’t heard of it. Now that it’s been around, though, for the last six or seven years here, hopefully when the states take another bite at the apple, fewer mistakes are made, they’ve learned some lessons from this first round, and I think the second slate of Opportunity Zones, if it comes to fruition at some point, possibly as early as next year, I think the zones that are named will be a lot more thoughtfully created. Any additional thoughts on OZ 2.0 from you, Ashley?

Ashley: Yeah, I think that one of the other big ones that we talked about was addressing reinvestments. So, if an Opportunity Zone exits before the 10-year period, if you exit an asset, that you have the ability to be able to kind of roll that over, to roll over the capital gains, not just the original basis. And I think that that could be huge, because that then creates what we’ve talked about before, is a super Roth, without the IRA component to it, but where you get this same kind of equivalent effect, which I think would be really attractive, particularly if we can democratize this, and we can make it so that it’s not just capital gains folks that can make the investment, but you can actually use after-tax dollars. And this would set it up to where you could basically take any kind of money and put it into the deal, and then be able to hold that until whatever the time period is. And so, if they’re gonna end up making it towards extended out every 10 years, that’ll probably push that 2047 timeline as well. And so then, you’re given the ability to be able to hold it for as long as you want, which I think is really interesting, because now we’re talking about significant appreciation over a long period of time, which gets us into a much longer-term horizon, just within investor psychology, which I think is crucial for our country as a whole, and the success of projects that do kind of historically have lower immediate returns, but have longer impact upon the economy, and upon the things that we want to improve.

So, I’d love to see that happen. And then I think the final thing is, is that we are going to see, no matter what, we’re going to see impact reporting requirements. And so, everybody needs to be thinking about that within the context of their Opportunity Zone deals, is what’s the true impact, and what kind of impact are we having upon the people that are actually inside of the Opportunity Zones in which we are investing? And so, I’m really excited to see what happens as a result of that, because we’ve got all kinds of great stories, but I’m gonna be really interested to see how some of the bigger funds go about really showing their impact. And I think that they’re gonna get creative, and we’re gonna see some really cool stuff happening.

Jimmy: I think so as well. I think the future for Opportunity Zones is bright. That’s the leading sentence I used in my email that I sent to my subscribers this morning, post-election. And the vibe in this room here, I wasn’t sure what to expect. My partner, Andy, even was mentioning to me a week ago, he said, “Jimmy, this is crazy. You guys are going there for this huge thing, and you don’t know what the mood in the room’s gonna be like. Is everybody gonna be down in the dumps about the election results? Or is everybody gonna be super excited and enthused? Is there gonna be a lot of momentum for Opportunity Zones?” And now I can safely say there’s a lot of momentum for Opportunity Zones going forward here. The atmosphere here has been electric today so far. And I think everybody in the room recognizes what’s in front of us here. The future is very bright. It looks very likely we’re gonna get an extension, and possibly a permanence for Opportunity Zones going forward. Ashley, we’re almost out of time, but any last thoughts from you? And tell our audience where they can go to learn more about you and OZPros also.

Ashley: Yeah. So, you can go to ozpros.com. And if you go to ozpros.com/podcast, it’s a special promotion for any opportunityzones.com listeners, as opposed to OpportunityDB. Got the branding right there. And we’d love to get on a strategy call with you. We’d love to talk through any ideas, or answer questions that you have. We’ve got a couple of different programs. We set up captive Opportunity Funds, and we’d love to figure out if there’s a way that we can help you to kind of execute on some Opportunity Zone thoughts, dreams, that kind of thing that you have.

I think that the takeaway that I would give to people is that it’s kind of like me. I had to make the decision that I was going to become a reformed attorney, and stop practicing, and actually get in the game. And that would be my challenge to everybody else, is get in the game. You’ve heard about Opportunity Zones. Get in the game now. Educate yourself about them. Get your Qualified Opportunity Fund set up. The barrier to entry is extremely low. We’ve made that process painless as possible, and as affordable as possible as well. We’ve set up over a thousand of them. We’ve helped over 4,000 people with their tax problems, and come up with really creative solutions. And so we’d love to help you get in the tax mitigation game.

Jimmy: Thank you, Ashley. And for our listeners out there and our viewers out there today, I will have show notes for today’s episode on our website. You can find those show notes at opportunityzones.com/podcast, and please do visit ozpros.com/podcast as well, to learn more about Ashley Tison and the services that he offers. And if you’re on YouTube, give us a thumbs up if you liked today’s episode, and please be sure to subscribe to us on YouTube, or your favorite podcast listening platform, to get notified of all the latest episodes we bring to you from opportunityzones.com. Ashley, it’s been awesome talking with you and getting to see you again. I love seeing you once or twice a year. Thanks for joining the podcast. I appreciate it.

Ashley: Absolutely, Jimmy. It’s been an honor and a privilege. Thanks.