M&A Murders & Accusations: The Good the Bad and The Ugly of Selling Your Business

Opportunity Zones: Tax Reduction and Elimination with Guest Blake E. Christian, CPA, Partner, HVCT

August 14, 2023 Rick J. Krebs, M&A Advisor, CPA and CEPA and Blake E. Christian, CPA
Opportunity Zones: Tax Reduction and Elimination with Guest Blake E. Christian, CPA, Partner, HVCT
M&A Murders & Accusations: The Good the Bad and The Ugly of Selling Your Business
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M&A Murders & Accusations: The Good the Bad and The Ugly of Selling Your Business
Opportunity Zones: Tax Reduction and Elimination with Guest Blake E. Christian, CPA, Partner, HVCT
Aug 14, 2023
Rick J. Krebs, M&A Advisor, CPA and CEPA and Blake E. Christian, CPA

In this episode we explore a powerful tax reduction and elimination strategy called Qualified Opportunity Zones (OZs).  Designed and requested by a group of billionnaires, these strategies were implemented to promote investment in rural areas, providing huge tax incentives to investors.

My guest,  Blake E. Christian, brings over 35 years of experience providing tax consulting and compliance services to clients that include multinational, publicly-traded corporations and closely held owner-managed businesses. Throughout his entire career, Blake has specialized in federal, state, and local tax incentive programs. Blake is leading the firm’s efforts in providing tax consulting services for Qualified Opportunity Zones (OZ). Blake and the HCVT OZ Team have formed over 50 Qualified Opportunity Funds (QOF) and over 50 Qualified Opportunity Zone Businesses (QOZB). They have also advised hundreds of other investors and professionals regarding the complexities of formation, operation, semi-annual testing, and restructuring of QOFs and QOZBs.

Visit us at:

Show Notes Transcript Chapter Markers

In this episode we explore a powerful tax reduction and elimination strategy called Qualified Opportunity Zones (OZs).  Designed and requested by a group of billionnaires, these strategies were implemented to promote investment in rural areas, providing huge tax incentives to investors.

My guest,  Blake E. Christian, brings over 35 years of experience providing tax consulting and compliance services to clients that include multinational, publicly-traded corporations and closely held owner-managed businesses. Throughout his entire career, Blake has specialized in federal, state, and local tax incentive programs. Blake is leading the firm’s efforts in providing tax consulting services for Qualified Opportunity Zones (OZ). Blake and the HCVT OZ Team have formed over 50 Qualified Opportunity Funds (QOF) and over 50 Qualified Opportunity Zone Businesses (QOZB). They have also advised hundreds of other investors and professionals regarding the complexities of formation, operation, semi-annual testing, and restructuring of QOFs and QOZBs.

Visit us at:

Audio file

Tax Reduction and Elimination through Opportunity Zones with Blake Christian.mp3


Hello and welcome to M&A, murderous and accusations. The good, the bad and the ugly of selling your business. We dig into what you need to know and how not to kill the sale of your business. Now here's our host Rick J Krebs, mergers and acquisitions advisor.

Hello everyone and welcome to M&A murders and accusations. The good, the bad and the ugly of selling a business. I'm pleased today to have a guest speaker, Blake Christian and Blake is a national expert on Opportunity Zones (OZs) and he's going to tell you what. I'm pleased to have you here today with us, Blake voter to be here. Thank you. Tell us a little bit about yourself and then tell us about opportunity zones.

And so I've been a. CPA for 43 years started my career at KPMG in Los Angeles. Just have been out in Utah for about 10 years and that we have an office in. Park City and small office in Salt Lake City. We have 13 offices. Total headcount of about 750, which makes us the makes us the top 30 CPA firm in the country. I spend probably 80% of my time the last few years on opportunity zones we've set up over 200 qualified opportunity funds and then? An equal number, actually more qualified opportunities, own businesses and as we'll get into the qualified opportunities owned businesses where the action is, it's where either your real estate development project is or where you're operating businesses. So you can actually stuff an operating. Business into a an opportunity zone.

Interesting. And it looks like you've done over 125 of these. In your career.

Right of the fund, it's actually larger now, but you know the actual funds were we're probably close to 200. And then each opportunity zone fund has at least one qualified opportunities own business. Many of them have multiple businesses.

So tell us a little bit about HCV.

T yeah. So HCT again, top 30 firm, we have 13 offices we're headquartered in, in West Los Angeles, nine of our offices are in California and then we have Park City, Salt Lake, Phoenix, AZ. And Fort Worth. In addition to my Oz practice, I do high level tax planning for individuals and corporations. We we're a full service for we do audits, we have a very large 401K audit practice and we do business management and consulting. Being in West LA, we have a lot of people in the movie business, often more often the people that are behind the camera instead of in front of the camera, the screen writers and. Producers and things and some musicians. So it's kind of an interesting practice.

So people, if they're looking for tax professionals or audit or accounting work, they can reach out to you and we'll and we'll share your credentials at the end of the podcast as well. So that's good to know. You don't just. Do opportunities, thoughts right? Right.

Here's some of our awards, but.

We can.

Get into the. The meat of it, if you'd like.

Now let's go. Ahead and learn about how opportunity zones started.

And so it was. It was part of the Trump 2017 Tax Act tax and Job Act, as you'll recall. And. Interestingly, you know, or, not surprisingly, President Trump has taken all the credit for the opportunity zone program. But to give credit where credit is due, it was actually the Obama administration that started the process. It just got passed during the Trump administration. So Sean Parker, who at a very young age started Napster and was an early investor in Facebook. All of his billionaire friends, when they would get together, they would, you know, talk, talk about how frustrating it was that they had this huge concentration of wealth often in in. Publicly traded stocks. Sometimes it was real estate, other assets and how there was no incentive for them to. Liquidate those they you know, they could get loans on them and they would hold them, you know, until they died and then get a step up in. Basis and so. The combination of that problem, along with the problem, you know, economic development people had done these many studies that when economic infusions went into different cities and things. Almost all of it was either into the Greater New York City area, Greater Los Angeles area. And you know Chicago? It was pretty. Limited where the money went and so. So he combined these economic development studies and seeing some of those shortfalls and these poverty stricken neighborhoods and said, hey, what if we encourage people to? Liquidate these big positions, either in publicly traded stock, real. They other assets could be artwork and incentivize them to invest in these communities. Wouldn't that be a great program? And I you know, again I think it's a brilliantly designed program and that's exactly what they did. They said, you know, look. We'll get into the more of the. Details, but you know sell your stock. Create a gain. We'll let you defer the gain. And if you invest in these communities and you hold those investments for at least 10 years, all the appreciation that you need on that investment will escape taxation on the federal side. And all but about 6 states followed suit and so it's both a federal exclusion and a state exclusion. The big states that didn't adopt it, California, are disappointingly Arkansas. North Carolina, Massachusetts and New York has kind of dialed it back a little bit, so, but most other states have adopted it. So let.

Me get this straight so. These people can sell their stock, sell their assets. And instead of paying the tax at the liquidity event, they get to defer the tax and if they keep their investment for 10 years, they could potentially eliminate that capital gain.

That's absolutely right. We defer the tax and the current code until December 31st, 2026 and so early adopters. You know, we're deferring gates for more than 7. Years now you can still. Defer it for four years. So essentially you're getting an interest free loan for four years and you know in today's interest rate environment that's a huge bargain. You can invest that money, compound your interest on a much bigger investment than if you had paid tax up front.

Well, I. Absolutely love this notion and I didn't share this with you, Blake, but I'm from a very small town in southeastern. And you go into these into these areas. In fact, I was in it. I was down in Green River, which is a small town just north of Moab, and you go down Main Street and the bank the nicest building in the whole town is a bank and it's, you know, made out of granite and it's solid and but it's boarded up it and you see these areas. These communities that. Are a little more. Rural but wages. Jobs are nearly non-existent and people are just kind of scratching out an existence there, and I'd love to see these. I want to call it smart money or smart dollars. I'd love to see the smart dollars coming into the community, boosting these, these more rural areas up and helping build them economically. And then they have money. For schools, they have money for. For social programs, they have money for. Or their roads and their streets and the things which these people need. So I just, I love this idea. And this this these opportunity zones are one of the very few. I don't want to call them loopholes, but it kind of.

Is right and I know it right it. So there there's 8700 census tracts. And census tracts are, you know, they're not defined by ZIP code or anything. They're these odd shaped areas. And in rural areas they can be, you know. 10s of square. Miles in in urban areas, they're usually. Just you know. A couple of city blocks, usually it's comprised of at least 10,000. You know, people, residents there, you know. Again it's across the country and they're not you. Know they're not all. That each governor got to pick the census tracts and they had to narrow down they had about. 5 to 1 ratio of what they could pick, and so they picked. You know census tracts that they felt. You know would. Would you know have? The best chance of bouncing back. A lot of these areas are pretty nice down in Salt Lake, there's some great ones and it's in proportion to population of the state. So California has about 880. Census tracks Utah only has about. 18 But there's still, you know, pretty impactful and people are investing. Provo is one of the generally one of the top five rated census tracts and actually I have my own laws fund located there.

So the census tracts work in people find them for people that are on the podcast.

That don't have a video. So there's two places opportunity. Dbdatabaseopportunitydatabase.com/now. And we'll try and spell it. But you just Google it and it will narrow it down for you. But Nova Brattice is kind of the 800 pound gorilla in the in the Oz Arena and they do a great job of getting information out to the public on this program. And so they have a very interactive. The base, but you can get it. Get to it either way or contact me and I can give. You the link got it.

And so as it stands for opportunity zone, right?

That's correct. Again, a bipartisan program and you know it's both Republicans and Democrats for the most part. Really like it? There's some detractors. You know, the programs underway. But for the most part, most people are pretty big fans of it.

Yeah, I love it. I had invested in a bunch of. We had 152 units out in Ohio and sadly that they were outside of the opportunity zone by one St. They were across the street from us, so we. Should have moved it just. A little bit, right? Right. So how does it work? How does the money work?

Yeah. So and just before we jump in there, the you know again no Nova Braddock who tracks this. There's been $34 billion of equity infused as of December. 31st in the opportunity zone funds and 10 billion of that was raised in calendar 2022 alone. So there's still. You know very strong momentum and. You know. You know, people are really. Liking the program so, so again there, there's really 3 baskets of potential benefit the first, the first one is the temporary deferral. So you, you sell your, you know, family Business Today, you sell a piece of real estate you could sell to your home. When you have more than a $500,000 gain, that extra gain you could roll into an au fund Bitcoin stock market gains, artwork collector cards, it's pretty unlimited. The first step is you sell, sell that asset. Generally you have 180 days. It's kind of like a 1031 exchange. You have 180 days at a minimum to roll that game into. An AUS fund. Now that could be. What we call. A public oz fund that you know is getting public money or you can. Set up your own. Oz fund what we call a captive OZ fund and about 90% of my clients are captive OZ funds, where wealthy people have a big gain, kind of a one time event. They set up their own sun and they control everything. They either go out. Do real estate deals or they start a new business? So that's the first one and that's what gets most people's attention. They, you know, they have this massive gain and they go geez I, you know, I don't know what I'm going to do with the money and I but I you know I don't. Want to pay tax, right, man? Yeah, I.

Was I was involved in a. So of a trucking company over in Colorado years ago and it was about an $18 million transaction and when the owner, the owner had been there for years, you know we started with one truck and used an oil field guy kind of a blue collar type guy, you know, type of guy that I just I really like and you should have heard the words come out of his mouth when. He realized he was going to put a third of the money. Yeah, right. And he was a dying ohm. He was so angry and a lot of these business owners feel that same way, you know, they're looking at this liquidity event, they've worked and sacrificed everything to build their business. And then now it's time to cash in on that. We have a liquidity event in, in local sand has their hand out for 30 or 40% of it. And so. You know, this is a great vehicle and we're so pleased to learn about. This one thing I think the listeners need to know is it it's. For capital gains. Only ordinary income. There's still a tax due on the on the ordinary income part of the sale.

Is that right? Like glad you brought that up. So, you know, depreciation recapture on tangible. Personal tea, which is higher Internal Revenue Code section 1245 is not eligible for this, but 12:50 which is the shell of a building. That, even though it's taxed at a higher rate and it doesn't always look like capital gains it, technically it's treated as capital gains. And that can. Be rolled over and that that's very important when somebody is selling a building so. So you can put more. Gain than a lot of people say. So again, so. So that's the first leg of this three legged stool is the temporary deferral. The step up in basis that actually has expired at the moment there was a 510 or 15% what we call basis. Well, where if you had $1,000,000, Gee and you deferred it until 2026 if. You had held. That au investment for seven years, by that time you got a 15% haircut on how much being so you'd only report 850,000 being or if you held it for five years. You only report 90% or $900,000. And so on. There is legislation that we'll get into in a second that the 5th, the 10 and the 5% may come back if you hold it between 5:00 and six years. By the time the program expires, they might push out that deferral period. In 2026 to 20. 28 There's a bipartisan bill out there, but it's been stalled in Congress because of dysfunctionality of. Of Congress right now. And the step up in base is to tell you the truth is the is the least valuable of these three because if you have a 20% capital gain and you've got a 10%. Basis adjustment it's only 2%. Additional yield on the whole investment over a 10 year period. So it's not a big deal, but the big one, the final leg of the stool is the permanent exclusion that's the step up in bases. So in my example you rolled $1,000,000. Yeah, you pay. Tax in 2027, because it was deferred until 2026. And now that $1,000,000 let's say is worth $3,000,000 ten years from now, the $2,000,000 appreciation during that 10 year period escapes federal taxation completely. Utah 100% exclusion in most other states other than those that I mentioned. And if it's a real estate deal or if, let's say with solar, all the depreciation you claimed? Goes cool along with the capital gain because you basically it's like a step up on death. Everything gets stepped up to fair market value the day before you sell it. If you meet the 10 year holding requirement. So it's extremely valuable program. There's really other than 1031, there's nothing else like it out there, but in my 43 years of practice this, this is, you know, the, you know, the silver bullet in tax planning. If you meet the requirements. Wow. So.

For someone who had sold their business, say a couple of months ago, because they'll get these calls from time to time, like where they're like, you know what? I sold my. Business. So we've funded and everything. What do I do? So they have 180 days after the sale to do this. So we can save some of these people from huge tax burden even after they've already sold, as long as it's within that window.

Correct. And it and it even gets better that if your game comes through on a chain one in about 80% of the fact patterns that we look at, you know somebody was holding that. Investment through a partnership and S Corp Trust regarded trust, and so the if the game comes through on the Q1, your 180 day clock doesn't start ticking until as late as March 15th of the year following the sale. So if I sold my business which is held in an S. Corp right now. And I have a large gain. My 180 days does not start until March 15th, 2024, because that's the first day that I would get a K1 or that's the deadline. Original deadline for K1 report that 2023 gain. So it's a very liberal. Rules I wouldn't have to make my investment until September of 2024. So there's a there's. A whole lot of people out there. You know if you're looking at an on an extended return, you've been told you have to pay a bunch of tax on the 2022 gain and that came through on a Q1. We can still set you up a an all this fund. And you can roll all the portion of that. Gain into that all this fund.

I'm going to have to go back on the. Transactions we closed last year and look them. Up. Send them your way.

Yeah. And the and the green thing. I'm like a 1031. There's no tracing of funds. So, you know, 1031, as you know, you have to put that money with an accommodator. You can never touch the. This you could do anything you want with the money and you could even go borrow the funds to invest in the OZ fund. You still get the deferral. So maybe if I could just take a minute to expand on the pending odds legislation. So if this has been out there for at least 18 months. The opportunity zone transparency extension and Improvement Act, and so almost all of it's beneficial. So as I mentioned, there's a there would be a two year extension of reporting the gain it would get extended from 12/31/2026. To 2020. Right. So two more years. Have been interest free loan. And then the five and 10% basis increase where you would take a 5 or 10% haircut on what you report on 12/31/28. As long as you hold that for five or six years now, actually because the legislation stalled, we're beyond being able to hold it for six years. But they would. They'll obviously adjust that, but the bottom line is this could very well come back. It's a bipartisan bill. Everybody in the OZ industry feels that this is going to come back, but it's just a matter of when it's going. To pass there. There's a couple of negatives in it, but necessary clean up where there were some laws, census tracts, it's less than 5% that were designated. And it was all within the rules, but some, some kind of wealthier census tracts were designated under some technicalities of the. Law and those are going to get unsettled. Now if you've started a project already there, you're going to be grandfathered, but they're going to eliminate those. And then and then bring in some new census tracts that will be available so. If this, if this passes, you're going to. See a whole another influx into the into the. Oz Investments, just because this is going. Really increase its attractiveness. The other thing which was in the original bill was kind of bouncing that it got stripped out, that they, they had some reporting requirements to gather. You know how many employees you have? Kind of what projects you're doing, they stripped it out at the last minute. Again, as a practitioner in this area was kind of frustrating that they did. They're going to put that back in. It'll be a little extra. Work on the CPA's and the fund managers, but it's useful information so that we can see if the program worked in 10. Years, right?

So let's talk about the ideal Oz candidate. You know now that now that you've described it, I'm sure that every person that's considering a sale of a business or they're excited about it, right, they're like, do I qualify? What do I what do I need to do? So tell us about where it works and where.

It doesn't work where? Well, well, obviously working your expertise, the company sale. So you know this is what you work with all day and so.

So that person.

That may be sitting on the sidelines going geez, you know, I. I you know, I think I'm just going to keep running and operating my business and you know, generating ordinary income for. Seven years and then I'll pass it on to my kids and or, you know, if they're really old, then I'll if I pass away, it'll get stepped up based us. But when you explain this to them takes the sting out of the transaction and so company sale is probably what we see the most. As the funds to invest in a in AUS fund real estate needs are probably #2. And again we maybe 10%. Of all this funds. We've set up our people with it, you. Know the crazy? Residential market over the last decade, a lot of people have some very massive gains on their sales of homes in California and here and. So we're staying, you know, multi million now you know I've had $20 million gain. On personal residences, go into all this funds stock market gains not seeing as many this year as prior years. But we had a. Whole lot of those in in the early years. You know, artwork collector cards, Bitcoin Oil Properties, I mean you, you name it. We've seen it. And So what I tell? People that the perfect person or profile. For the captive AUS fund, where you're going to do the investment rather than putting the money. With some third party is if you're a serial entrepreneur, which is kind of your bailiwick, Rick. And then secondly, if either you have some real estate development experience or friends and family have that. So if you have those relationships already or you could even you know back somebody with a with a good operating business, I'd be at. And that's, that's where your money. You go, you know, these are, you know that this is kind of our client base you know it's made-up of cereal entrepreneurs, a lot of real estate developers. So this this program kind? Of works perfectly for that the other the other one that we run into a lot is somebody's in the middle of a 1031 transaction and they can't find a replacement property in time. Or they can't reinvest all of it and so. We've salvage. Bad 1031 transactions because there's a lot longer timeline, especially if it's on a K1 gain to reinvest those funds. We generally went and investor that's you know, if they're younger and in good health that's better. If I had, if I had a 75 year old entrepreneur that sold his business, I might not have him go into it, even though his heirs would still get. The Oz treatment, if they hold it for the 10 year period. It just it just is always the best fact pattern. So those are where. We sometimes will talk about it doing. It, but you do have to understand, you're going to have to hold it for the full 10. Years, but we have. Modeled it out, and even if you hold it for just for the deferral period in about 90% of cases. You're much better off doing the Oz fund because of the compounding earnings you get during that deferral.

Gotcha. So a 10/31 rescue, I love it.

Yeah, yeah, but this this is. I won't go into this, but uh, if there is an installment sale, which is quite common in a business sale as you know. Each one of those installment payments will start a new 180 day period, and so, you know, we have a lot of clients that are getting paid out five, ten years. And so they'll have. A longer period of time to reinvest. You know you'll. Have my slide deck so you can share. With people but this this is. Out of the timeline for reinvestments, you know, the other thing is once, once you've set up the OZ fund. You have. You know, at least six months. It could be two. Years up or 18 months and 18 months to reinvest, but then? You know, everybody's like, well, how quickly do I have to reinvest it into O's property, either real estate or operating business? You have another 31 months. From the time. That you drop the money down into your qualified opportunities own business so. It's basically four years to be able to figure out what your business plan is and to find appropriate reinvestment property. So it's, you know, it's really, really quite beneficial for people that don't, you know, don't want to rush into something.

By letting the people that I work with like their business, is the single largest financial transaction of their life. When we sell it, as they say in Japan, this is their. Rice bowl right. And they want to protect it. And so they want to be very careful and I'm pleased to hear that they have up to four years to decide which investments they don't need to rush in to be into any like in at 10:30 one what happens a lot of times is you have those requirements, those time requirements and the clocks ticking to identify the new properties. And so I know those people feel rushed, sometimes even pushed into investments. Which, if they took extra time, they may not invest in, but that's not the case with this one, where you have up to four years to invest these funds I love. That right and then?

Just to quickly compare your captive Oz fund versus public fund. You know the captive side. You're in control. You have overall lower fees and you exit when you what you know you might decide not to hold it for the full take years. You might have an emergency, you might pull out a portion of it if you. Invest in public funds and there are some good ones and you know, glad to share those with you or your listeners. But you're going to be giving away 20. The 30% minimum of that through their carried interest waterfall, you've got annual management fees carried interest transfer fees and you really don't have any control over. Over the exit you. You could you could sell your piece, but you know selling. The underlying you might. Say hey you. Know we should sell this real estate because it's. Top down, we don't have any control over that matcha. So I know, I know, we're close to being out of time here, but you know, the just a couple of quick issues, you know where people get in trouble as these entities generally are set up as partnerships. We come in a lot to fix broken laws funds and you have to make sure that those are really partnerships that you have a secondary partner in there. A lot of times. Will have people with single member LLC's which are going to effectively get treated as corporations, which is not a good result. We, you know, people don't elect correctly and so it's this is this is a complex area. It's not for the faint of heart and there's. You know, even though your. CPA may be great. This is a very specialized area and we work well in the same box with other CPA's. We'll just review their returns before they're filed. But do get professional help. If you if you. Go down this.

Path so. So I think we're OK to take a little extra time on this on this. Blake, I want to bring up something that that you spoke about, which I think is very, very important and I see that I'm a CPA also, right. And we were trained in, in accounting for a lot of times. When a business owner sells their CPA, who does their tax returns and their and their accounting work? They don't see these strategies. This is a very specialized practice and is very narrow practice and so your CPA, oftentimes they don't, they don't have clients who sell their business often and so they're not familiar with this. I mean, last time I looked, the tax code was about 100,000 pages. Long. You know it's. It's huge and so it's just too much to know. So I think it's critical for business owners to know when you're contemplating a sale, you absolutely have to get with someone like Blake and his firm who specializes in and deals with the sale of businesses every day. I mean, these things this, this practice and the and the tax code and what you need to know to do this, oftentimes your CPA, even though they're great. And you love. Them, but they're not going to know these things. They're not going to be aware of them just simply because they don't deal with it every day. And so you're definitely going to want to enlist the help of people like. Like in his firm. Because Blake can run sophisticated financial modeling on these, they've got the software and they've got the ability to show you and help you make an informed. So I just I can't emphasize that enough. So many times I've seen people just throwing money away and tipping the government because a well meaning CPA didn't know the tax law or didn't understand the different strategies out there for reducing the taxes. Oftentimes that sadly I see people will go to their CPA and they're like, OK. You know, tell me about some different strategies to minimize my taxes on the sale of my largest financial asset, my whole life, they're like, here's their strategy. Pay the tax. Right in my mind, that's not a strategy, right?

Right. And there's just a lot of bad information out there on this program where they, you know, people just don't understand the extended time frame. They said, you know, they'll tell their client. OH you've missed the window. It's too late. I was on the phone with four private Equity Partners, had a very large gain in March. And you know, they had been told by their CPA's that it was too late for them to set up and it, and it was a K1 fee they have until. 2024. To set it up. They were, yeah. And they were so relieved. And you know, so we're going to set up for OZ funds for the different partners, but wow.

One other thing question for you. So with C Corp and we're selling those, we see a lot of these old C Corps hanging out, you know from the 80s. Does it do anything about the double? Taxation can we help with that and?

Well, yes. Yeah, I mean, you know, the age-old problem, the, the. Buyer in a of A C. Corp, you know, doesn't want to buy the stock, they want to buy the assets. So if you if you could talk them into and you might be able to compromise on the sale price in order to have them sell. Sell the stock rather than the asset. And then you would avoid the double taxation. But even, you know, even if you sell the assets it, it certainly doesn't mitigate you know because again if you are getting a four year interest free loan and then your reinvestment is getting tax free. Treatment it if you if you look at the overall tax burden, you know on all pieces of that you're just look out of the double taxation. Even if you had an asset. So you know, there's definitely benefit of the OZ program, whether it's selling AC Corp or A S Corp or some other flow through entity, got it. And as I as I mentioned. Have my own. Laws fund, where we convert shipping containers into housing. And so we have both, both the real estate, you know we own the commercial real estate as well as we have the operating business. So and this is this is 1 technique that you know I. Couple of attorneys developed early on is.

You can you.

Can set this up so you can have 1202 treatment. All the operating business. That's why we split them up into two separate businesses and you could actually exit the operating business within five years, even though it was under the old structure and get your up. The $10 million gain or 10 times your the larger 10 times your basis that you invested in that and then hold the real estate for the full 10 years? So it gives you. Know more flexibility on an. Exit and you don't have to wait the. Full 10 years on the operating business.

Love it and you talked about section 1202. That's something that some people may not be familiar with, but that's another. If you qualify and it's structured properly, another way to eliminate and defer the taxes, that's like an added layer. That's not. That's not the cherry on the top. That's like the frosting. And another cake on the top of the cake, I. Love it like.

Right, 1202 is. Another you know highly specialized area that we. You know, often we'll get in after the fact. Somebody sold and then it's like, you know, we start looking at the facts and it's like, you know, you're 1202 eligible potentially, but there's a lot of ways you could blow 1202 also.

Oh, yeah, yeah. I tell people if they have one of those old C Corps, say, if you qualify, you're one of the lucky I tell them it's. Like hitting the Lotto. To me you qualify. That's terrific. So you've given us a lot of great information today. Thank you. But I want you to share in fact, I'll go ahead and read it on the screen here. So Blake Christian and his e-mail is 


That's how you reach Blake.  Or you can call this firm directly at 435-200-9260, 243-5200.

Thank you so much for joining us today. Blake, did you have anything else that you wanted to share before we were in the podcast today?

No, I just really appreciate. Uh, all that you do, Rick, and your expertise on company sales and. You know, I know. Will be continue to work together and any questions I can ask answer. For any of. Your listeners, I'm glad to do it.

Sounds terrific. Thanks again, Blake, and thanks everyone for attending our podcast, murders and accusations. The good, the bad and the ugly of selling your business. And today it's the good of selling your business tax savings. Have a great day, Blake, and thank you for tuning in everyone. Bye now.

Thank you for attending our podcast. We invite you to join us for future episodes of M&A, murders and accusations. The good, the bad and the ugly of selling your business. You can also visit us at www.bsalesgroup.com or e-mail Rick directly at rick@bsalesgroup.com.
Learn more about Opportunity Zones: https://www.hcvt.com/people-Blake-Christian

Abbout Blake Christian, out guest
How Opportunity Zones (OZs) Started
How OZs Help Small Towns in America
How Does The Money Work?
Example of the Sale of an S-Corp
Who Qualifies for an OZ?
Bad 1031 Rescue and When an OZ is not Useful
OZs Require a Knowledge Niche
How an OZ Helps C-Corps and Double Taxation
How to Reach Blake to Get More Information