Anatomy of an OZONE Deal

Let's talk about the anatomy of an #opportunityzone deal...from the perspective of a Real Estate owner. An owner of Real Estate, let's call him Fred, sells his building for $1 million dollars. Fred has a capital gain of $500K on the sale of the property. Fred can invest that $500K into an OZ of his own making. Fred can purchase a new piece of RE for $500K, and defer his taxes on the gain for the next few years. Now Fred is smart he knows that he has to double his "basis" in the property. However it is the basis only in the property not the land. So if Fred's land allocation is 30% then Fred need only increase his basis in the property by $350K. Fred can make improvements to his property of $350K for a spend cost of $850K. 7 years later...Fred has been collecting great rent from his property but will now need to pay taxes on his original gain with a 15% reduction, or $425K. 10 years later...Fred might sell his property for 1.5 Million. The appreciation is tax free. Which means he is taking home the entire purchase price tax free... Sounds like fun to me.