Latest news with #TaxCutsandJobsActof2017
Yahoo
17 hours ago
- Automotive
- Yahoo
Proposed new auto loan tax deduction could help buyers get break on interest
If taxpayers actually end up seeing a new, proposed tax break on the interest borrowers pay on car loans, at least some can claim it all started in the Motor City. President Donald Trump, who was running for his second term last year, dropped that car loan bombshell during his comments at the Detroit Economic Club on Oct. 10, 2024, less than a month before the presidential election. Trump said then that he planned to propose making interest on car loans fully deductible. Now, we're getting more of the details for what such a deduction could look like based on what was tucked into the broad tax plan released by House Republicans on May 12. The White House calls the proposed legislation "One, big, beautiful bill." If you're looking to buy one, big, beautiful SUV or truck or car, pay attention to the haggling in Washington to see whether a new deduction on car loans will become a reality. The good news: The GOP bill calls for an above-the-line deduction of up to $10,000 in car loan interest during a given taxable year. You'd pay no tax on that interest, if you qualified. Creating an above-the-line deduction means that the proposed tax break on car loan interest would not just apply to the roughly 10% of taxpayers who itemize deductions. It also would apply to the vast majority of people who do not itemize and instead claim the standard deduction. The standard deduction became far more prevalent after the major tax changes in the Tax Cuts and Jobs Act of 2017 — the Trump tax cut initiative that expires at the end of 2025. Trump is seeking to extend those tax cuts that are set to expire later this year. The so-so news: All new car and truck buyers who take out a car loan won't qualify for the deduction. Much will depend on your income — and the car or truck that you buy. Under the plan, House Republicans are calling for making the auto loan interest deduction limited to $10,000. But the deduction would phase out by $200 for every $1,000 of modified adjusted gross income above $100,000 for single filers and $200,000 for joint filers, according to an analysis by the Tax Foundation, a nonprofit research organization. As a result, a single person with $149,001 in income or more would not receive any deduction, according to Mark Luscombe, principal analyst for Wolters Kluwer Tax & Accounting in Riverwoods, Illinois. The deduction phases out entirely, based on his calculations, for a married couple making $249,001 or more. More personal finance: Restart of student debt collections expected to trigger more student loan scams The auto loan interest deduction would be temporary under the GOP plan, and it would apply to auto loans that are taken out in 2025, 2026, 2027 and 2028. If you took out a five-year car loan in 2027, for example, you could only expect two years for a deduction on your car loan interest to apply at this point. The wording of the bill indicates that you would only get the deduction for those specified four years, Luscombe said. Again, the tax rule has yet to be approved, so don't bank on that tax deduction just yet. We're talking about a tax break for buyers of qualified passenger vehicles that are "manufactured primarily for use on public streets, roads, and highways," according to the House Ways and Means Committee section-by-section breakdown of the bill. The vehicle could be a car, minivan, van, sport utility vehicle, pickup truck or even a motorcycle. An applicable passenger vehicle for the tax break also would include all-terrain vehicles and recreational vehicles, if their final assembly took place in the United States. The tax break would apply only to auto loans that were taken out to buy cars or trucks that have their final assembly in the United States. It's debatable at this point whether the tax break would apply to both new car loans, as well as used car loans. The language in a Ways and Means Committee states: "No tax on car loan interest." It does not specify if that applies only to car loans taken out by a consumer to buy a new car. It also does not state whether a car loan for buying a used car would apply. Luscombe said it's not clear what the odds are yet for Congress to pass a car loan deduction or even a deduction with the same rules outlined in the Ways and Means bill. Bills were introduced in both the House and the Senate that focused on the auto loan interest deduction. Detroit Free Press Washington correspondent Todd Spangler reported about one bill by U.S. Rep. Bill Huizenga, which is dubbed the "Made in America Motors Act." Huizenga, R-Holland Township, introduced that legislation May 7, which would allow a deduction of up to $2,500 in a given year for interest paid on a loan to buy a motor vehicle if it was built in the United States. The differences in various bills are likely to emerge and be debated in the coming weeks. "Any provision is likely to be weighed in terms of its impact on the overall budget numbers in trying to make the overall bill meet the budget requirements," Luscombe said. A key point to understand: Your entire monthly car payment would not be fully deductible. If you're paying $834 a month for your car loan, you're not looking at a $10,000 a year deduction. Jonathan Smoke, chief economist for Cox Automotive, said consumers need to understand that car loans are amortized so that each payment covers interest and principal. You're not paying the same amount of interest each year on your car loan. More of your payment goes to cover interest, Smoke said, in the first years of the loan. Therefore, the maximum tax deduction would be in year one and then it would get smaller in future years. Let's assume an interest rate of 9.5% on a six-year car loan. On a $42,000 car loan in this example, the borrower would pay $768 a month. The first year of interest would add up to a bit more than $3,750 in this example. For someone at a tax rate of 24%, that deduction would reduce taxes by roughly $900. But it's important to note that the deduction would decline in subsequent years of that car loan. It's also key to note the dollar value of the deduction would be bigger for someone who makes more money and pays a higher tax rate. It would be smaller for someone who earns less money and pays a lower tax rate. Ivan Drury, director of insights at Edmunds, said interest over the life of a loan is often overlooked as consumers become focused on monthly payment. Interest rates have hovered around 7% for the last two years, he said, and the amount financed has been at or slightly above $40,000. As a result, consumers are paying nearly double the amount of interest that they had in previous years. "While a tax deduction won't wash away all of the increased costs associated with purchasing a new car in today's age, it will certainly dull the edge," Drury said. If the legislation is approved by Congress, consumers would need to pay attention to the interest rate they're paying, Drury said, especially since this deduction wouldn't be available across the board or even on some models where different trim levels are assembled outside of the United States. Another obvious but essential point: You'd need to qualify for a car loan to be able to take advantage of this tax break. Increasingly, experts warn more consumers are experiencing financial fragility, struggling to manage their money and their debt. Many consumers now expect that it will be far tougher to find an affordable car loan and many fear rejections in obtaining credit, according to a survey related to credit access by the Federal Reserve Bank of New York. The survey takes into account what it calls "discouraged borrowers" or those respondents who stated they did not apply for any credit in the past 12 months because they did not think they would get approved, despite reporting a need to borrow. Those discouraged borrowers reached 8.5% in the February survey, the highest level since the start of the survey in October 2013. For auto loan applications, the survey noted, the average perceived probability of a rejection reached 33.5%, the highest level since the start of the series. Cox Automotive's research indicated that consumers saw credit access dip in April, particularly for those with lower credit scores. "Lenders were more cautious about extending credit to higher-risk borrowers," according to Cox Automotive. A variety of issues could dampen someone's ability to buy a car this year or next — loss of a job, fear of losing a job, a credit score that was dinged in 2025 by nonpayment of student loans. Credit scores for student loan borrowers started getting hit again this year, as delinquencies resumed appearing on credit scores. High car prices and high interest rates on car loans are another issue that can cause someone to put off buying a car or truck. Higher tariffs on many cars will drive up prices, too. Ford Motor Co., for example, raised prices in May on the Mustang Mach-E electric SUV, Maverick pickup and Bronco Sport, which are built in Mexico. Prices increased by as much as $2,000 on some models, as first reported by Reuters. In addition, many drivers owe more than their current car is worth, given the high prices they paid during the pandemic and used car values now, cutting into the potential trade-in value. The expectation is that U.S. car and light truck sales will fall behind last year's red-hot run when it comes to sales in 2025, 2026 and 2027, according to a forecast issued in May by University of Michigan economists. Right now, U-M economists expect U.S. passenger vehicle sales to drop sharply later this year, from an annual pace of 16.4 million in the first quarter of 2025 to 14.8 million in the third quarter once the tariffs on vehicle imports drive up prices for new cars and trucks. So, a tax break on the interest you pay each year on your car loan certainly could rev up an industry facing plenty of challenges. Free Press Washington correspondent Todd Spangler contributed to this report. Contact personal finance columnist Susan Tompor: stompor@ Follow her on X @tompor. This article originally appeared on Detroit Free Press: Proposed car loan interest tax deduction: Who would qualify
USA Today
18 hours ago
- Automotive
- USA Today
Proposed new auto loan tax deduction could help buyers get break on interest
Proposed new auto loan tax deduction could help buyers get break on interest Show Caption Hide Caption How Trump's tariffs will effect everyday prices With new tariffs on imports, several everyday goods are likely to become more expensive for American consumers. Cars and auto parts, many of which are produced through an integrated North American supply chain, will see price increases as manufacturers adjust to higher costs. unbranded - Newsworthy The sweeping GOP tax bill calls for an above-the-line deduction of up to $10,000 in car loan interest during a given taxable year. You'd pay no tax on that interest, if you qualified. The proposed tax deduction aims to drive sales of U.S.-built cars and trucks, fulfilling a campaign promise made in Detroit by President Donald Trump. If taxpayers actually end up seeing a new, proposed tax break on the interest borrowers pay on car loans, at least some can claim it all started in the Motor City. President Donald Trump, who was running for his second term last year, dropped that car loan bombshell during his comments at the Detroit Economic Club on Oct. 10, 2024, less than a month before the presidential election. Trump said then that he planned to propose making interest on car loans fully deductible. Now, we're getting more of the details for what such a deduction could look like based on what was tucked into the broad tax plan released by House Republicans on May 12. The White House calls the proposed legislation "One, big, beautiful bill." If you're looking to buy one, big, beautiful SUV or truck or car, pay attention to the haggling in Washington to see whether a new deduction on car loans will become a reality. How big or beautiful that car loan deduction would be The good news: The GOP bill calls for an above-the-line deduction of up to $10,000 in car loan interest during a given taxable year. You'd pay no tax on that interest, if you qualified. Creating an above-the-line deduction means that the proposed tax break on car loan interest would not just apply to the roughly 10% of taxpayers who itemize deductions. It also would apply to the vast majority of people who do not itemize and instead claim the standard deduction. The standard deduction became far more prevalent after the major tax changes in the Tax Cuts and Jobs Act of 2017 — the Trump tax cut initiative that expires at the end of 2025. Trump is seeking to extend those tax cuts that are set to expire later this year. The so-so news: All new car and truck buyers who take out a car loan won't qualify for the deduction. Much will depend on your income — and the car or truck that you buy. Take a look under the hood of this tax break Under the plan, House Republicans are calling for making the auto loan interest deduction limited to $10,000. But the deduction would phase out by $200 for every $1,000 of modified adjusted gross income above $100,000 for single filers and $200,000 for joint filers, according to an analysis by the Tax Foundation, a nonprofit research organization. As a result, a single person with $149,001 in income or more would not receive any deduction, according to Mark Luscombe, principal analyst for Wolters Kluwer Tax & Accounting in Riverwoods, Illinois. The deduction phases out entirely, based on his calculations, for a married couple making $249,001 or more. More personal finance: Restart of student debt collections expected to trigger more student loan scams The auto loan interest deduction would be temporary under the GOP plan, and it would apply to auto loans that are taken out in 2025, 2026, 2027 and 2028. If you took out a five-year car loan in 2027, for example, you could only expect two years for a deduction on your car loan interest to apply at this point. The wording of the bill indicates that you would only get the deduction for those specified four years, Luscombe said. Again, the tax rule has yet to be approved, so don't bank on that tax deduction just yet. We're talking about a tax break for buyers of qualified passenger vehicles that are "manufactured primarily for use on public streets, roads, and highways," according to the House Ways and Means Committee section-by-section breakdown of the bill. The vehicle could be a car, minivan, van, sport utility vehicle, pickup truck or even a motorcycle. An applicable passenger vehicle for the tax break also would include all-terrain vehicles and recreational vehicles, if their final assembly took place in the United States. The tax break would apply only to auto loans that were taken out to buy cars or trucks that have their final assembly in the United States. It's debatable at this point whether the tax break would apply to both new car loans, as well as used car loans. The language in a Ways and Means Committee states: "No tax on car loan interest." It does not specify if that applies only to car loans taken out by a consumer to buy a new car. It also does not state whether a car loan for buying a used car would apply. Luscombe said it's not clear what the odds are yet for Congress to pass a car loan deduction or even a deduction with the same rules outlined in the Ways and Means bill. Bills were introduced in both the House and the Senate that focused on the auto loan interest deduction. Detroit Free Press Washington correspondent Todd Spangler reported about one bill by U.S. Rep. Bill Huizenga, which is dubbed the "Made in America Motors Act." Huizenga, R-Holland Township, introduced that legislation May 7, which would allow a deduction of up to $2,500 in a given year for interest paid on a loan to buy a motor vehicle if it was built in the United States. The differences in various bills are likely to emerge and be debated in the coming weeks. "Any provision is likely to be weighed in terms of its impact on the overall budget numbers in trying to make the overall bill meet the budget requirements," Luscombe said. Your entire car payment wouldn't be deductible A key point to understand: Your entire monthly car payment would not be fully deductible. If you're paying $834 a month for your car loan, you're not looking at a $10,000 a year deduction. Jonathan Smoke, chief economist for Cox Automotive, said consumers need to understand that car loans are amortized so that each payment covers interest and principal. You're not paying the same amount of interest each year on your car loan. More of your payment goes to cover interest, Smoke said, in the first years of the loan. Therefore, the maximum tax deduction would be in year one and then it would get smaller in future years. Let's assume an interest rate of 9.5% on a six-year car loan. On a $42,000 car loan in this example, the borrower would pay $768 a month. The first year of interest would add up to a bit more than $3,750 in this example. For someone at a tax rate of 24%, that deduction would reduce taxes by roughly $900. But it's important to note that the deduction would decline in subsequent years of that car loan. It's also key to note the dollar value of the deduction would be bigger for someone who makes more money and pays a higher tax rate. It would be smaller for someone who earns less money and pays a lower tax rate. Ivan Drury, director of insights at Edmunds, said interest over the life of a loan is often overlooked as consumers become focused on monthly payment. Interest rates have hovered around 7% for the last two years, he said, and the amount financed has been at or slightly above $40,000. As a result, consumers are paying nearly double the amount of interest that they had in previous years. "While a tax deduction won't wash away all of the increased costs associated with purchasing a new car in today's age, it will certainly dull the edge," Drury said. If the legislation is approved by Congress, consumers would need to pay attention to the interest rate they're paying, Drury said, especially since this deduction wouldn't be available across the board or even on some models where different trim levels are assembled outside of the United States. Finding and qualifying for an affordable car loan Another obvious but essential point: You'd need to qualify for a car loan to be able to take advantage of this tax break. Increasingly, experts warn more consumers are experiencing financial fragility, struggling to manage their money and their debt. Many consumers now expect that it will be far tougher to find an affordable car loan and many fear rejections in obtaining credit, according to a survey related to credit access by the Federal Reserve Bank of New York. The survey takes into account what it calls "discouraged borrowers" or those respondents who stated they did not apply for any credit in the past 12 months because they did not think they would get approved, despite reporting a need to borrow. Those discouraged borrowers reached 8.5% in the February survey, the highest level since the start of the survey in October 2013. For auto loan applications, the survey noted, the average perceived probability of a rejection reached 33.5%, the highest level since the start of the series. Cox Automotive's research indicated that consumers saw credit access dip in April, particularly for those with lower credit scores. "Lenders were more cautious about extending credit to higher-risk borrowers," according to Cox Automotive. A variety of issues could dampen someone's ability to buy a car this year or next — loss of a job, fear of losing a job, a credit score that was dinged in 2025 by nonpayment of student loans. Credit scores for student loan borrowers started getting hit again this year, as delinquencies resumed appearing on credit scores. High car prices and high interest rates on car loans are another issue that can cause someone to put off buying a car or truck. Higher tariffs on many cars will drive up prices, too. Ford Motor Co., for example, raised prices in May on the Mustang Mach-E electric SUV, Maverick pickup and Bronco Sport, which are built in Mexico. Prices increased by as much as $2,000 on some models, as first reported by Reuters. In addition, many drivers owe more than their current car is worth, given the high prices they paid during the pandemic and used car values now, cutting into the potential trade-in value. The expectation is that U.S. car and light truck sales will fall behind last year's red-hot run when it comes to sales in 2025, 2026 and 2027, according to a forecast issued in May by University of Michigan economists. Right now, U-M economists expect U.S. passenger vehicle sales to drop sharply later this year, from an annual pace of 16.4 million in the first quarter of 2025 to 14.8 million in the third quarter once the tariffs on vehicle imports drive up prices for new cars and trucks. So, a tax break on the interest you pay each year on your car loan certainly could rev up an industry facing plenty of challenges. Free Press Washington correspondent Todd Spangler contributed to this report. Contact personal finance columnist Susan Tompor: stompor@ Follow her on X @tompor.
Mint
3 days ago
- Business
- Mint
What is ‘revenge tax' Section 899 of the One Big Beautiful Bill? Why is it raising alarms on Wall Street?
The United States' House of Representatives passed the One Big Beautiful Bill Act, also known as OBBBA, a budget reconciliation bill which includes major provisions of the Tax Cuts and Jobs Act of 2017. Wall Street investors are shifting their focus to 'revenge tax' Section 899 of the bill, which can impact the attractiveness of US assets. Section 899 of the 'One Big Beautiful Bill' contains a clause that allows for the possibility of imposing a progressive tax load of up to 20 per cent on the passive income of foreign investors, such as dividend or royalty payments. This charge will be paid by entities like sovereign funds and companies that have businesses in the United States or individuals from nations that impose duties on the US that it considers unfair, including a digital service tax. According to Reuters' report from Friday, 30 May 2025, George Saravelos, the head of FX Research at Deutsche Bank, said in a note that this legislation is expected to transform the ongoing trade war between the US and other world nations into a capital war. 'We see this legislation as creating the scope for the U.S. administration to transform a trade war into a capital war if it so wishes, a development that is highly relevant in the context of today's court decision constraining President Trump on trade policy,' said Saravelos in the note. US stock market investors are becoming concerned over Section 899 in the 'One Big Beautiful Bill,' as it is expected to target foreign investors in the United States. This, in turn, may weaken the demand for US government bonds and the US dollar. This comes amid ongoing uncertainties due to the baseline and reciprocal tariffs imposed by US President Donald Trump on all imports from other world nations, which have led to a tariff war that is raging to date. If the US Senate passes the bill, the rising tax rate on foreign investors is likely to raise concerns in addition to the tariff woes, rising fiscal deficit, and ballooning debt for the Western nation. 'It would deter foreign investment in U.S. assets at a time when the country faces increasing reliance on foreign capital to finance its ballooning debt. Clearly, this is not good for the dollar,' Elias Haddad, senior market strategist at Brown Brothers Harriman (BBH), told the news agency. A Fortune report cited Even House Ways and Means Committee Chair Jason Smith, who in a panel discussion said that he hopes that it is never used and instead acts more like a 'deterrent,' which stops other nations from cracking down on US firms. As the Section 899 fears loomed over Wall Street, the global financial services group, Nomura, told the news agency that if the Senate passes the Bill, the US should likely expect a 'pushback' against the new tax rate or negotiations to seek exemptions for US Treasuries and agency mortgage-backed securities. The Bloomberg US Dollar Spot Index was up 0.05 per cent at 99.329 as of 12:00 a.m. (EDT) on Friday, 30 May 2025.
Business Journals
3 days ago
- Business
- Business Journals
A primer for emerging real estate and private equity funds
With the surge in capital formation and the growing interest of investors in alternative assets, an increasing number of entrepreneurs, developers, and operators are launching investment funds. Whether you're raising capital for a value-add real estate project, a portfolio of operating businesses, or a targeted private equity strategy, achieving success in forming and managing an investment fund requires strategic planning and execution. Learn recommended practices for emerging real estate and private equity funds. Embracing these key practices can significantly enhance your chances of success and boost returns for you and your investors. Structuring the fund Fund sponsors should select the appropriate legal and tax structure for their fund. Most real estate and private equity funds are structured as limited partnerships or limited liability companies treated as partnerships for federal income tax purposes. This pass-through treatment allows gains and losses to flow to investors while avoiding entity-level taxation. However, fund structuring is not a 'one-size-fits-all.' Considerations include: Investor pool (domestic vs. foreign, tax-exempt vs. taxable) Carried interest allocations Preferred return waterfalls State of domicile/registration and related state tax implications Blocker entities for unrelated business taxable income (UBTI) or Foreign Investment in Real Property Tax Act (FIRPTA) concerns Recent discussions on the treatment of carried interest also highlight the importance of thoughtful structuring from the outset. Carried interest: What's changed and what may lie ahead Carried interest is the share of partnership profits a general partner receives from the investing partners for managing the investment and taking on the entrepreneurial risk. It can be taxed as either ordinary income or capital gain, depending on the nature of the income generated by the partnership. Typically, carried interest is a form of equity compensation granted to investment fund managers (i.e., real estate, private equity, venture capital, or hedge funds) in exchange for their investment services. Fund managers benefit from long-term capital gains tax treatment (20%) on their carried interest when underlying fund investments are sold, as opposed to ordinary income tax treatment (up to 37%) typically imposed on wage or service income. Over the past 20 years, lawmakers have introduced various proposals to increase the tax burden on carried interest. For example, the Tax Cuts and Jobs Act of 2017 increased the holding period requirement to three years to generate long-term capital gains treatment on carried interest. Most recently, there was a proposal to treat carried interest as an interest-free loan from the limited partners to the general partner, which would be taxable upon grant. Imputed interest on the loan would have been treated as deemed compensation to the general partners, regardless of profit generation. This proposal did not go into effect. Although sweeping changes have not yet passed, this remains a hot-button issue and an area of legislative focus. Fund sponsors are advised to meticulously document the services provided by general partners and structure partnership agreements in accordance with evolving tax guidance. Sponsors should collaborate with tax advisors to rigorously test current waterfall models and assess potential tax liabilities under various scenarios. Regulatory environment: SEC oversight and the evolving definition of accredited investor In 2020, the U.S. Securities and Exchange Commission (SEC) expanded the definition of an accredited investor to include individuals with certain professional certifications, such as Series 7, 65, or 82 licenses, and entities meeting specific criteria. This expansion increased the pool of potential investors. However, further reforms may tighten or reshape this definition. As of 2024, the SEC has signaled renewed interest in enhancing investor protections in the private markets. Potential changes could include: Reassessment of financial thresholds for accredited investors, which are currently set at $200,000 annual income or $1 million net worth Implementing enhanced disclosures for private offerings Enforcing more robust regulations around Form D filings and general solicitation rules For fund sponsors raising capital under Regulation D exemptions — particularly Rule 506(b) or 506(c) — it's crucial to comply with accreditation standards. This includes maintaining up-to-date and defensible verification processes, investor questionnaires, and recordkeeping. Fund administration: Getting it right from day one Strong fund administration is essential for maintaining compliance, scaling operations efficiently, and building investor trust. Outsourcing also allows fund managers to focus on sourcing deals and fostering investor relationships, rather than reconciling ledgers or calculating tax basis. While investment strategy often drives returns, disciplined back-office execution can provide the foundation for long-term success. Emerging funds often underestimate the operational complexity of ongoing fund administration. Accurate capital accounting, investor reporting, K-1 issuance, and waterfall calculations are mission-critical and increasingly scrutinized by investors and regulators alike. Key focus areas for strong fund administration include: Establishing a strong operational framework with documented accounting policies and internal controls Implementing effective onboarding processes for investors Leveraging technology for efficiency and access Prioritizing timely, transparent, and accurate reporting Providing consistent support and proactive communication Cultivating and maintaining a culture of responsiveness and accountability Staying compliant and ahead of regulatory changes Adopting investor relations and governance best practices Effective fund administration helps deliver a consistent, transparent, and scalable investor experience. By adopting these recommended practices, private investment funds can build trust, provide compliance, and achieve long-term success in the competitive real estate and private equity markets. Outsourced accounting: Enhancing efficiency and transparency For many emerging managers, outsourced accounting and finance solutions offer scalability and cost efficiency. These services typically include bookkeeping and general ledger maintenance, financial reporting and budgeting, cash flow management and treasury services, as well as assistance with audit and tax documentation. Investors increasingly expect financial transparency and timely reporting. An outsourced accounting function tailored to fund structures can deliver investor-ready statements, real-time dashboards, and improved decision-making. This approach is also important for preparing for eventual institutional capital or future fund raises. Tax compliance and state nexus considerations Funds investing across multiple states — particularly in real estate — must also contend with a patchwork of state and local tax rules. Filing requirements for composite returns, withholding obligations for nonresident investors, and sales/use tax exposure are all concerns. Additionally, pass-through entity (PTE) tax elections — now available in over 30 states — can mitigate the $10,000 federal state and local tax deduction cap for individual investors. Fund managers should evaluate whether PTE elections are beneficial for their investor base and structure their tax compliance accordingly. Proactive tax planning, including quarterly estimate management and basis tracking, is essential for maintaining investor confidence and avoiding unpleasant surprises. Safeguarding your funds and your business Real estate and private equity funds must prioritize cybersecurity to protect sensitive data, provide business continuity, and maintain the trust of stakeholders. These industries are particularly vulnerable to cyber threats due to collecting and storing sensitive information, such as social security numbers and banking details of tenants and investors. A data breach can lead to identity theft, fraud, and legal liabilities, while insecure online transactions can result in payment fraud and phishing attacks. Complying with various regulations and state privacy laws is essential to avoid fines and reputational damage. By implementing strong security measures and educating employees about potential threats, real estate and private equity funds can mitigate risks and protect their digital assets against cyber crime. How CLA can help with real estate and private equity funds Private investment offers significant opportunities for emerging real estate and private equity fund managers. Whether you are forming your first fund or scaling an existing platform, getting the structure, strategy, and service providers right is critical to long-term success. At CLA, we understand the complexities and challenges associated with real estate and private equity funds. Our team of experienced professionals provides comprehensive support tailored to your needs, helping you to navigate with confidence. For more information on real estate and private equity, contact Carey Heyman at or 310-288-4220. The information contained herein is general in nature and is not intended, and should not be construed, as legal, accounting, investment, or tax advice or opinion provided by CliftonLarsonAllen LLP (CLA) to the reader. For more information, visit
Yahoo
22-05-2025
- Business
- Yahoo
HOME-PRICE TRENDS IN OPPORTUNITY ZONES STILL FOLLOWING NATIONAL PATTERNS DURING FIRST QUARTER OF 2025
Price Gains Inside Opportunity Zones Targeted for Economic Redevelopment Settle Down Along with Broader U.S. Housing Market During Slow Winter Period IRVINE, Calif., May 22, 2025 /PRNewswire/ -- ATTOM, a leading curator of land, property data, and real estate analytics, today released its first-quarter 2025 report analyzing qualified low-income Opportunity Zones targeted by Congress for economic redevelopment in the Tax Cuts and Jobs Act of 2017 (see full methodology below). In this report, ATTOM looked at 3,558 zones around the United States with sufficient data to analyze, meaning they had at least five home sales in the first quarter of 2025. The report found that median single-family home and condo prices increased from the fourth quarter of 2024 to the first quarter of 2025 in 48 percent of Opportunity Zones around the country with enough data to measure. That happened as the national median price remained the same. Medians were up annually in 59 percent of Opportunity Zones during a time when the typical nationwide price went up 8 percent. As the U.S. housing market boom continued into in its 14th year, median prices grew more than 10 percent annually in close to half the Opportunity Zones analyzed. Those trends, in and around low-income neighborhoods where the federal government offers tax breaks to spur economic revival, extended a long-term pattern of home values inside Opportunity Zones closely tracking broader nationwide price shifts for at least the last four years. That scenario has held regardless of whether the housing market has seen small, moderate or robust gains. Despite prices continuing to rise in a majority of Opportunity Zone markets when measured year over year, the first-quarter trends again were mixed, with typical values again rising far more often in higher-priced zones than in the very lowest-priced neighborhoods. That continued to show more significant weakness at the very bottom of the U.S. housing market, suggesting that those areas are reaping the fewest benefits from rising home values and could be more vulnerable if the broader market surge stalls. Nevertheless, the latest patterns mark yet another sign that some of the most distressed communities in the nation are showing economic strength, or limited weakness, compared to other markets around the country. By several important measures, Opportunity Zones continued to enjoy even better price trends than the nation as a whole during the first quarter of 2025. For example, annual median price increases bested typical nationwide gains in a slightly larger portion of Opportunity Zones than elsewhere. "Home-value patterns inside Opportunity Zones remain pretty much in lock-step with the rest of the country, just as we've seen ever since we started looking at this niche of the market. From one to another, those very local markets remain volatile, with troubling signs in the very lowest-priced areas. But the big picture shows remarkable, and mostly positive, consistency," said Rob Barber, CEO for ATTOM. "This likely reflects the ongoing short supply of homes for sale across the country and rising prices, which pushes marginal buyers to roll the dice on locations with varying levels of economic distress." Barber added that "the home-buyer money flowing into these communities shows enduring potential for them to turn around, providing solid foundations for investors looking to use the Opportunity Zone incentives." Opportunity Zones are defined in the Tax Act legislation as census tracts in or alongside low-income neighborhoods that meet various criteria for redevelopment in all 50 states, the District of Columbia and U.S. territories. Census tracts, as defined by the U.S. Census Bureau, cover areas that have 1,200 to 8,000 residents, with an average of about 4,000 people. Amid varying levels of economic challenges, typical home values across wide swaths of Opportunity Zones remained far below those around most of the nation in the early months of 2025. Median first-quarter prices inside 80 percent of the zones with enough data to measure stood below the U.S. median of $355,000. That was about the same portion as in other time periods since 2020. In addition, median prices remained less than $200,000 in almost half the zones. Considerable price volatility also continued inside Opportunity Zones, with median values either dropping or increasing by at least 5 percent in nearly three-quarters those locations from late 2023 to early 2024. That again likely reflected small numbers of sales in many zones. Still, when taken as a whole, the latest overall trends in Opportunity Zones still generally matched the nationwide path of home prices during the first few months of 2025. High-level findings from the report: Median prices of single-family homes and condos increased from the fourth quarter of 2024 to the first quarter of 2025 in 1,491 (48 percent) of the Opportunity Zones around the U.S. with sufficient data to analyze, while staying the same or decreasing in 52 percent. Measured annually, medians remained up from the first quarter of 2024 to same period this year in 1,762 (59 percent) of those zones. (Among the 3,558 Opportunity Zones included in the report, 3,120 had enough data to generate usable median-price comparisons from the fourth quarter of 2024 to the first quarter of 2025; 3,004 had enough data to make comparisons between the first quarter of 2024 and the first quarter of 2025). Both the quarterly and annual trends in Opportunity Zones matched patterns in other areas: median prices rose quarterly and annually in the same portion of census tracts outside of Opportunity Zones - 48 percent and 59 percent. Typical values were up more than 10 percent annually in 42 percent of Opportunity Zones, compared to 37 percent of neighborhoods outside the zones. However, in a continuing potential sign of trouble, median prices were up annually in only 47 percent of Opportunity Zones where homes commonly sold for less than $125,000 during the first quarter of 2025. Among states that had at least 25 Opportunity Zones with enough data to analyze during the first quarter of 2025, the largest portions of zones where median prices increased annually were in Indiana (medians up from the first quarter of 2024 to the first quarter of 2025 in 75 percent of zones), New York (72 percent), Missouri (70 percent), Colorado (69 percent) and New Jersey (65 percent). States where prices were up annually in the smallest portion of zones included Nevada (median prices up in 44 percent of zones), Washington (49 percent), Florida (49 percent), Iowa (52 percent) and Tennessee (52 percent). Of the 3,558 zones in the report, 1,097 (31 percent) had median prices below $150,000 in the first quarter of 2025. That was down from 34 percent of zones with sufficient data a year earlier and 57 percent five years ago. Another 556 zones (16 percent) had medians in the first quarter of this year ranging from $150,000 to $199,999. Median values in the first quarter of 2025 ranged from $200,000 to $299,999 in 24 percent of Opportunity Zones while they topped the nationwide first-quarter national median of $355,000 in just 20 percent. The Midwest continued in the first quarter of 2025 to have larger portions of the lowest-priced Opportunity Zone tracts. Median home values were less than $175,000 in 61 percent of zones in the Midwest, followed by the Northeast (42 percent), the South (39 percent) and the West (6 percent). Report methodologyThe ATTOM Opportunity Zones analysis is based on home sales price data derived from recorded sales deeds. Statistics for previous quarters are revised when each new report is issued as more deed data becomes available. ATTOM's analysis compared median home prices in census tracts designated as Opportunity Zones by the Internal Revenue Service. Except where noted, tracts were used for the analysis if they had at least five sales in the first quarter of 2025. Median household income data for tracts and counties comes from surveys taken by the U.S. Census Bureau ( from 2019 through 2023. The list of designated Qualified Opportunity Zones is located at U.S. Department of the Treasury. Regions are based on designations by the Census Bureau. Hawaii and Alaska, which the bureau designates as part of the Pacific region, were included in the West region for this report. About ATTOMATTOM powers innovation across industries with premium property data and analytics covering 158 million U.S. properties—99% of the population. Our multi-sourced real estate data includes property tax, deed, mortgage, foreclosure, environmental risk, natural hazard, neighborhood and geospatial boundary information, all validated through a rigorous 20-step process and linked by a unique ATTOM ID. From flexible delivery solutions—such as Property Data APIs, Bulk File Licenses, ATTOM Cloud, Real Estate Market Trends—to AI-Ready datasets, ATTOM fuels smarter decision-making across industries including real estate, mortgage, insurance, government, and more. Media Contact:Megan Data and Report Licensing:949.502.8313datareports@ View original content to download multimedia: SOURCE ATTOM
