Ivanka and Jared are invested in company that could benefit from real estate tax break they endorsed: report
One of the key new programs outlined in the GOP's tax cut bill was "Opportunity Zones" — economically-lagging areas designated by the Treasury Department where investors can defer or exclude 10-15% of taxes on capital gains.
Two of the biggest proponents to this change in the tax code were Ivanka Trump and Jared Kushner, who sold program hard. Earlier this year, President Donald Trump invited his daughter to speak about the program at an Oval Office meeting because she's "been pushing this very hard," and Ivanka subsequently tweeted that "it was an honor" to work with Sen. Tim Scott (R-SC) and Treasury Secretary Steve Mnuchin on "this important policy."
But according to the Associated Press, there may be a reason these two were so keep to promote the Opportunity Zones program: they stand to profit from it.
Trump and Kushner jointly own a big stake in a real estate investment firm, Cadre, that recently announced it is launching a series of Opportunity Zone funds that seek to build major projects under the program from Miami to Los Angeles. Separately, the couple owns interests in at least 13 properties held by Kushner's family firm that could qualify for the tax breaks because they are in Opportunity Zones in New Jersey, New York and Maryland — all of which, a study found, were already coming back.
Six of the Kushner Cos. buildings are in New York City's Brooklyn Heights area, with views of the Brooklyn Bridge and Manhattan skyline, where a five-bedroom apartment recently listed for $8 million. Two more are in the beach town of Long Branch, N.J., where some oceanfront condos within steps of a white-tablecloth Italian restaurant and a Lululemon yoga shop list for as much as $2.7 million.
There's no evidence the couple had a hand in selecting any of the nation's 8,700 Opportunity Zones, and the company has not indicated it plans to seek tax breaks under the new program. But the Kushners could profit even if they don't do anything — by potentially benefiting from a recent surge in Opportunity Zone property values amid a gold rush of interest from developers and investors.
Trump's daughter and son-in-law already enjoy enormous amounts of income from their holdings. The bulk of their combined $82 million in outside income in 2017 came from real estate. They do not take a direct salary from their roles advising the president, which could run afoul of anti-nepotism statutes— but the conflicts of interest from their private income remain a serious potential problem.
While the Opportunity Zones program is new, the idea behind them is not. States and cities have been trying to lure businesses with targeted economic development incentives for years, with Amazon even forcing cities to hold a tax-cut bidding war over where to locate their new headquarters. Economists who have studied these programs find that throwing tax breaks at businesses to set up in a certain area usually don't benefit that area in the long term.
While the empirical evidence does not offer a lot of support for Opportunity Zones, they are good for Trump's family. And that appears to matter a lot in public policy nowadays.