Sohodojo Advisory Board Member
Jim Schneider
The Taxman86 Speaks...
14 October 2000
<< Previous issue] [Next issue >>
A Tale Of Two Articles, And Tax Incentives.
1. Welcome to the Burbs.
Last March we saw an interesting article in the New York Times labeled "Saying Goodbye to the 'Burbs," which talked about the concept of "live, work, and play."
Today one of our readers sent us the following from the New York Times: "A Tale of Two Downtowns" [October 12, 2000] By JOHN LELAND, which talks about a distressed historic neighborhood.
We checked out the address [659 Auburn Ave., 30312 is in the Atlanta, Georgia Empowerment Zone] and found that it is in the Atlanta Empowerment Zone
As the article states:
"...She was talking about Studioplex, Atlanta's $18.3 million,
225,000-square-foot experiment in urban redevelopment. Two years
ago, a nonprofit group called the Historic District Development
Corporation took over the disused cotton compress warehouse with a
bold plan: in a city of epic suburban sprawl, the group
envisioned an arena-size loft community to draw artists and Web
pioneers to a poor downtown neighborhood. Some would live and work
there. Others, like Mr. Evans, would set up shops to lure
visitors. Nonartists were welcome as well. 'We figure that anybody
who wants to live with artists is O.K.,' said Mtamanika
Youngblood, president of the development group. 'I look at them as
patrons...' "
Just like Cinderella got her slipper for the ball, these artists and developers in Atlanta, parts of Los Angeles, St Louis, Chicago, and the 31 Empowerment Zones plus all of Washington, D.C., just got their tax incentives [what happened to Seattle, Portland, Phoenix, Las Vegas, San Diego and the other 115 Enterprise Communities?].
See: Proposed
"...(c) EFFECTIVE DATE- The amendments made by this section shall apply to qualified empowerment zone asset acquired after the date of the enactment of this Act.]:
`SEC. 1397B. EMPOWERMENT ZONE CAPITAL GAIN.
- `(a) GENERAL RULE- Gross income shall not include qualified capital gain from the sale or exchange of any qualified empowerment zone asset held for more than 5 years.
- (c) QUALIFIED EMPOWERMENT ZONE ASSET- For purposes of this section--
- `(1) IN GENERAL- The term `qualified empowerment zone asset' means--
- `(A) any qualified empowerment zone stock,
- `(B) any qualified empowerment zone partnership interest, and
- `(C) any qualified empowerment zone business property.
- `(2) QUALIFIED EMPOWERMENT ZONE STOCK-
- `(A) IN GENERAL- Except as provided in subparagraph (B), the term `qualified empowerment zone stock' means any stock in a domestic corporation if--
- `(i) such stock is acquired by the taxpayer after the date of the enactment of this section (December 31, 2001, in the case of a renewal zone) and before January 1, 2010, at its original issue (directly or through an underwriter) from the corporation solely in exchange for cash,
- `(ii) as of the time such stock was issued, such corporation was an enterprise zone business (or, in the case of a new corporation, such corporation was being organized for purposes of being an enterprise zone business), and
- `(iii) during substantially all of the taxpayer's holding period for such stock, such corporation qualified as an enterprise zone business.
- `(B) REDEMPTIONS- A rule similar to the rule of section 1202(c)(3) shall apply for purposes of this paragraph.
- `(3) QUALIFIED EMPOWERMENT ZONE PARTNERSHIP INTEREST- The term `qualified empowerment zone partnership interest' means any capital or profits interest in a domestic partnership if--
- `(A) such interest is acquired by the taxpayer after the date of the enactment of this section (December 31, 2001, in the case of a renewal zone) and before January 1, 2010, from the partnership solely in exchange for cash,
- `(B) as of the time such interest was acquired, such partnership was an enterprise zone business (or, in the case of a new partnership, such partnership was being organized for purposes of being an enterprise zone business), and
- `(C) during substantially all of the taxpayer's holding period for such interest, such partnership qualified as an enterprise zone business.
- A rule similar to the rule of section 1202(c)(3) shall apply for purposes of this paragraph.
- `(4) QUALIFIED EMPOWERMENT ZONE BUSINESS PROPERTY-
- `(A) IN GENERAL- The term `qualified empowerment zone business property' means tangible property if--
- `(i) such property was acquired by the taxpayer by purchase (as defined in section 179(d)(2)) after the date of the enactment of this section (December 31, 2001, in the case of a renewal zone) and before January 1, 2010,
- `(ii) the original use of such property in the empowerment zone commences with the taxpayer, and
- `(iii) during substantially all of the taxpayer's holding period for such property, substantially all of the use of such property was in an enterprise zone business of the taxpayer.
- `(B) SPECIAL RULE FOR SUBSTANTIAL IMPROVEMENTS- The requirements of clauses (i) and (ii) of subparagraph
- (A) shall be treated as satisfied with respect to--
- `(i) property which is substantially improved by the taxpayer before January 1, 2010, and
`(ii) any land on which such property is located.
The determination of whether a property is substantially improved shall be made under clause (ii) of section 1400B(b)(4)(B), except that `the date of the enactment of this section' shall be substituted for `December 31, 1997' in such clause..."
Enjoy, you heard it here first.
Jim Schneider, LL.M.
Taxman86
<< Previous issue] [Next issue >>
The Taxman86 Speaks... is copyright 1998-2010 by James E. Schneider, LL.M. Inc.
Our Privacy Statement
© 1998-2010 Sohodojo, Inc. unless otherwise stated.
"War College" of the Small Is Good Business Revolution
Website design and hosting by Sohodojo Business Services,
A Portfolio Life nanocorp
