The “GO-ZONE”, or Gulf Opportunity Zone, is a tax credit act of 2005 that was implemented by President Bush after the extremely active hurricane season of 2005 which brought us storms like Katrina and Rita. The original act was through 2008 but was extended to 2010 for the Mississippi Coast.
The act allows for bonus, or accelerated depreciation of real estate investment properties put into service after these storms and allows for investors to depreciate up to 50% of the property (or properties) in the first year.
The Go-Zone act also allows for investors to recapture taxes for up to five years back and push credits forward as well, making a truly remarkable tax advantage for purchasing or constructing qualifying properties in the area.
BE CAREFUL
There are a lot of agents and builders pushing properties to sell under this act which are BAD investments. They push these bad investments under the guise that you can recapture your previous taxes, however, there are numerous properties that make MUCH better sense from an investment standpoint and still qualify for these incentives.
There are also a lot of agents who are misrepresenting, or straight out lying about these incentives. It is important that you talk with a tax attorney or CPA that is familiar with the Go-Zone act. There are many investors that can benefit from this but there are others who are being pitched on it and have no use for it. Talk with your accountant to see if you can benefit from it and then give us a call to help you locate quality investment properties that make sense.
