Opportunity Zones

AN OPPORTUNITY ZONE IS A COMMUNITY WHERE NEW INVESTMENTS, UNDER CERTAIN CONDITIONS, MAY BE ELIGIBLE FOR PREFERENTIAL TAX TREATMENT. LOCALITIES QUALIFY AS OPPORTUNITY ZONES IF THEY HAVE BEEN NOMINATED FOR THAT DESIGNATION BY THE STATE AND THAT NOMINATION HAS BEEN CERTIFIED BY THE SECRETARY OF THE U.S. TREASURY VIA HIS DELEGATION AUTHORITY TO THE INTERNAL REVENUE SERVICE.

Tax Incentives

Opportunity Zones offer investors three incentives for putting their capital to work in targeted communities:

Temporary deferral

An investor can defer capital gains until 2026 by rolling their gains directly over into an Qualified Opportunity Fund

Reduction:

Investment in the Qualified Opportunity Zone provides a step-up in basis of 10% in Year 5, followed by an additional 5% in Year 7, creating a total 15% reduction in tax liability.

Exemption:

Any capital gains on subsequent investments made through a Qualified Opportunity Fund accrue tax-free as long as the investors stays invested in the fund for at least 10 years

On June 14th, Department of the Treasury certified final round of states’ nominations, bringing total number of qualified census tracts to more than 8,700 across all states, territories, and the District of Columbia.