Opportunity Zones

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Opportunity Zone Basics

Qualified Opportunity Zones were created by the 2017 Tax Cuts and Jobs Act, designed to spur economic development and job creation in distressed and low-income communities by providing a capital gains reinvestment mechanism that defers and reduces and excludes tax liability on gains from qualified investments.

An Opportunity Zone is a community that has been nominated by the stated and certified by the Treasury Department as qualifying for this program.

Requirements:

  • Investment in an Asset (real estate, business, infrastructure, etc.)

  • The asset is located in an Opportunity Zone

  • Capital originates from a recent capital gains

  • Investment to occur before 2036

Benefits:

  • Tax liability payment deferral until 2026

  • 10% step-up in basis if held a minimum of 5 years & invested by 2021

  • 100% federal capital gains tax exclusion on sale, if held for a minimum of 10 years.

Qualified Opportunity Zone Fund

Any investment vehicle which is organized as a corporation or partnership for the purpose of investing in qualified opportunity zone property that holds at least 90% of its assets in a qualified opportunity zone.

 

Qualified Opportunity Zone Property

The three key funding structures that qualify for Opportunity Zones are as follows:

  • Qualified Opportunity Stock

  • Qualified Opportunity Zone Partnership

  • Qualified Opportunity Zone Business Property

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