Mourners in front of the Marathon Clothing store, the centerpiece of rapper Nipsey Hussle's plans to revitalize his neighborhood.
Hussle was part of an investment group that was planning to use a tax incentive carved out in a recent federal law to revive not only his neighborhood, but other forgotten, low-income communities in 11 cities, Washington, D.C. and Puerto Rico. And Hussle, an activist who has been hailed for never abandoning his ’hood even after earning a Grammy nomination, had also derived a way to have residents invest alongside him. The plan was to crowdfund from each community and give residents an ownership stake in every project created in their neighborhood.
Investors can take proceeds that would normally be subjected to hefty capital gains taxes — such as those from the sale of a business, stocks or an investment property — and put them into an opportunity zone investment fund to defer and potentially reduce those taxes. To see the full tax benefit, the funds must be invested for a decade.
John Lettieri, president and CEO of the Economic Innovation Group, part of a coalition that successfully lobbied Congress to create opportunity zones as part of the tax overhaul, acknowledged those concerns. That’s why, he said, it’s important that local governments and community groups draft strategies to protect residents.