> ## Content Index
> Fetch the complete content index at: https://www.smdp.com/llms.txt
> Use this file to discover other available public pages before exploring further.

# Red-hot GOZONE entices investors
- URL: https://www.smdp.com/red-hot-gozone-entices-investors/
- Published: 2007-02-21T16:00:00.000Z
- Updated: 2026-10-24T23:19:05.000Z
- Author: Guest Author
- Tags: Opinion, Santa Monica, #archive-import

*By Alan Johnston In your Space*

IN AN EFFORT TO STIMULATE INVEST- MENT in the hurricane ravaged section of our country, the government is offering significant tax incentives to real estate investors and small business owners via the GOZONE program.

On December 21, 2005, the president signed the Gulf Opportunity Zone Act of 2005 (H.R. 4440). The act provides relief for taxpayers with business interests in the GOZONE. Qualifying real estate assets and businesses must be located in the areas hit by hurricanes Katrina, Rita and Wilma. You can visit www.irs.gov for a complete listing of the qualifying areas.

The act provides a deduction of 50 percent of the adjusted basis for real property using the Modified Accelerated Cost Recovery System (MACRS) with a recovery period of 20 years or less; computer software; water utility property; qualified leasehold improvements; residential and nonresidential real property. A key to eligibility for a commercial property is currently used in a trade or business where the original in-service date is post Aug. 27, 2005\. The original in-service date for residential income property must be prior to 2009\. There is an additional deduction allowed of up to 50 percent of the cost of debris removal if the waste is from structures damaged during the hurricanes or the demolition of existing structures too damaged to be recovered.

Taxpayers may also elect to carry over a Net Operating Loss (NOL) for up to five years. What and how properties qualify for the NOL carry over are specific and should be discussed with a tax professional familiar with the GOZONE. There are some exceptions regarding the Alternative Minimum Tax (AMTI) for a NOL with a five year carry over. It should be noted that the 50 percent depreciation also applies to new property built prior to 2008 and there are increased tax write offs for small businesses with operating losses incurred post Aug. 27, 2005.

While GOZONE incentives are attractive from a tax planning perspective, both long and short-term economics must be considered, and, as with any investment, a well defined exit strategy is key. As always a consultation with your legal and tax professionals should be considered a necessity.

For more information contact www.irs.gov, www.gozonefordummies.com and www.gozoneonline.com You can reach ALAN JOHNSTON at 1-877-4 TM 1031 or Visit www.tm1031exchange.com for a complete list of investment properties and to download the TM 1031 Tool Kit.

*Originally published in the Santa Monica Daily Press print edition on February 21, 2007.* [Read the original PDF.](https://s3.us-east-1.amazonaws.com/smdp%5Fbackissues/022107.pdf?ref=smdp.com)