The Opportunity Zones program was established by Congress in the 2017 Tax Cut and Jobs Act as an innovative approach to spurring economic development and job creation by allowing investors to receive tax benefits. Economically-distressed communities were nominated by each state and then certified as Opportunity Zones by the Secretary of the U.S. Treasury.
Even if a person doesn’t live, work or have a business in an Opportunity Zone, he or she can still receive tax benefits by investing in an Opportunity Fund. Investments in certain properties or businesses could allow taxpayers to defer immediate capital gain from the sale of stock or property and permanently defer appreciation on their Opportunity Zone Funds if they hold their ownerships in the Fund for 10 years. The Opportunity Zone Funds use the capital invested to make equity investments in businesses and real estate in Opportunity Zones designated by each state.
The IRS has compiled Opportunity Zone FAQs that our tax team found helpful.
Below is an interactive map to view the current designated Opportunity Zones:
If you have questions about owning real estate in an Opportunity Zone or investing in an Opportunity Fund, contact Warren Averett.