Oconee County, SC

  

Oconee County is located in the northwestern corner of South Carolina sharing western and northern borders with Georgia and North Carolina. While you may not be familiar with Oconee County, you may be familiar with Clemson University, located just across Lake Hartwell to the east, which is #27 out of 381 national universities in US News and World Reports' latest rankings and home to the 2018 NCAA National Football Champions. With its mountains and beautiful lakes, Oconee County is referred to as the state’s “Golden Corner” and has a number of advantages that present tremendous opportunities for growth and development including:


  • Clemson University: Due to its increasing national exposure, Clemson University is experiencing rapid growth and is a key driver of economic development in Oconee County.
  • Nature and Climate: Oconee County is blessed with beautiful mountains in its northwestern regions and three majestic lakes in Jocassee, Keowee, and Hartwell. The climate is mild and seasonal and natural disasters are non-existent.  All of these features combine to make Oconee County an ideal area in which to live and has proven to be particularly attractive as a retirement destination, poised to benefit from the demographic tailwind of the  Baby Boomer generation.
  • Location: Oconee County is non-urban, but conveniently located within easy driving distance to urban areas such as Greenville, SC, Charlotte, NC, and Atlanta, GA. Greenville-Spartanburg Airport is 45 minutes away, with Charlotte Douglas International and Atlanta Hartsfield International each just over 2 hours away.
  • Business Friendly: Oconee County is welcoming to business and development. Low taxes, government flexibility, and limited bureaucratic interference make it an easy place to establish profitable pursuits.


For more in-depth information regarding Oconee County please see the Information page on this site. 

Opportunity Zones of the Golden Corner

  

Opportunity Zones are census tracts spread across the nation that have been specially selected to receive unique tax advantages as part of the 2017 Tax Cuts and Jobs Act with the desire to attract investment and spur economic development. These zones were identified, with extensive input from local leaders and officials, as containing a unique blend of below average current economic conditions, but above average economic potential. Here are some of the basics regarding opportunity zones as they apply to investors, property owners, qualified opportunity funds, developers, and entrepreneurs.

Investors

  

Any investor who has a realized capital gain in any investment of virtually any type has the potential to defer and reduce their taxable liability on that gain by investing it into an opportunity zone. This can only be accomplished, however, by "rolling" that gain into a Qualified Opportunity Fund (QOF) within 180 days of the sale that generated the gain. The QOF must then invest the funds received into opportunity zone property or businesses. By investing the gain in the QOF the investor can avoid paying any capital gains tax due for up to 7 years. If the investor does not withdraw the funds for five years the tax amount due is reduced by 10%. If the investor does not withdraw the funds for another two years the tax amount due is reduced another 5%.  At the end of year 7 the capital gains tax is now due. If the investor retains the investment in the fund for 10 years upon withdrawal the gain on the original investment is tax free.


Example:  An investor purchased $100,000 of a publicly traded stock over a year ago and has recently sold that stock for $200,000. The capital gain subject to tax is therefore $100,000. Assuming a tax rate of 20% the tax due is $20,000. However, if the investor put $100,000 into a QOF there is no tax due at present and none would be due for another 7 years. At the end of 7 years the tax would be due, but it would only be $17,000 as a result of the 15% reduction. Note that it is strongly recommended that the investor pay the $17,000 tax with funds held outside the QOF. By doing so the original investment of $100,000 made into the QOF continues to grow. Now let’s assume that at the end of 10 years from the original investment into the QOF the $100,000 investment is now worth $200,000. At that point the investor could liquidate the investment in the QOF and the $100,000 gain would be tax free or the investor could leave the investment in the fund where it would continue to grow tax free. 


This is a high level overview. Feel free to contact me if you have questions or need additional details.

Property Owners

Unlike investors, the opportunity zone legislation conveys no direct tax benefits to current property owners within the zones. However, clearly property owners stand to gain as capital flows into the area. Whether you own residential or commercial property or even raw land you may stand to benefit. The benefits, however, may not be limited solely to property within the zone. Property owners near by, particularly those just outside the zones, may also benefit indirectly as economic revitalization begins to positively impact the surrounding area. If you are an Oconee County property owner and have questions about how this new legislation may affect you please contact me so we can discuss your particular situation further.

Funds, Developers, and Entrepreneurs

  

If you are unfamiliar with Oconee County please review its advantages in the “Oconee County, SC" section above. If you are unfamiliar with the basics of opportunity zones please review the “Opportunity Zones” and "Investors" sections above. There is a host of resources on the internet today that provide you with more in-depth information regarding Oconee County and opportunity zones. I have provided links to some of these resources on the “Information” page of this site. Feel free to contact me anytime if you have questions and I will do my best to answer them for you or refer you to a source that I believe will have the answers. There is no charge for my service. 


  • Qualified Opportunity Funds: The primary benefit to qualified opportunity funds, as I see it, is an incentivized flow of investor funds available to capture upon which fees can be generated.  


  • Developers: The primary benefit to developers is a new source of capital. Keep in mind that many of these zones and the property within them qualify for additional government and tax incentives.


  • Entrepreneurs: The term “fund” in opportunity funds is a bit of a misnomer. Typically when you hear the term “fund” you think of an aggregation of assets, as in mutual funds. While that is certainly one option, the legislation allows for virtually any corporation or partnership to self-identify as a qualified opportunity fund (QOF) with the filing of a simple form with the IRS. There is no pre-approval process. So, for an entrepreneur starting a new enterprise, who would typically form a corporation or partnership anyway, there is no reason not to designate it as a QOF and locate that business inside an opportunity zone. QOF status does not provide any tax benefits at the business level as the new enterprise grows. Normal tax rules still apply. However, at the end of 10 years and at any time thereafter the business could be sold at a potential profit tax free!