Opportunity Zones HQ
Find Opportunity Funds for your Capital Gains
Opportunity Zones HQ
- WHAT ARE OPPORTUNITY ZONES?
- What qualifies as an Opportunity Zone?
- What are the tax benefits of investing in Opportunity Funds?
- I’M INTERESTED, LET’S GET STARTED
WHAT ARE OPPORTUNITY ZONES?
An Opportunity Zone is an economically-distressed community where new investments, under certain conditions, may be eligible for preferential tax treatment. Opportunity Zones are designed to spur economic development and job creation in these communities by providing tax benefits to investors.
Opportunity Zones are a new community development program established by Congress in the Tax Cuts and Jobs Act of 2017 to encourage long-term investments in low-income urban and rural communities nationwide. The Opportunity Zones program provides a tax incentive for investors to re-invest their realized capital gains into Opportunity Funds that are dedicated to investing into Opportunity Zones designated by the chief executives of every U.S. state and territory.
The U.S. Treasury, in collaboration with State and Local governments, has certified 8,762 communities in all 50 states, the District of Columbia, five U.S. territories and Puerto Rico as Opportunity Zones.
“Nearly 35 million Americans live in areas designated as Opportunity Zones. These communities present both the need for investment and significant investment opportunities.” – US Treasury
- A federal list of designated opportunity zones are available by clicking here.
- Most States have their own websites and maps as well.
What qualifies as an Opportunity Zone?
To qualify as an O-zone, a census tract must have a poverty rate of 20% or higher or a median household income that is less than 80% of the surrounding area. The law generally allows for 25% of a state’s low-income community population census tracts to be designated as qualified opportunity zones. Governors are responsible for identifying the areas in their states to be designated as opportunity zones. The same definition of a “low-income community” that is used by the new markets tax credit (NMTC) as the basis for defining an opportunity zone.
WHAT ARE THE BENEFITS?
A qualified opportunity fund (QOF) is an investment vehicle that specializes in aggregating private investments and deploying that capital in an Opportunity Zone (Ozone). To take advantage of the tax benefits of investing in Opportunity Zones, investors must reinvest their capital gains from a prior investment into a Qualified Opportunity Fund (QOF), within 180 days of the recognized sale of that prior investment.
Under Section 1400Z of the Tax Cuts and Jobs Act of 2017, investors who elect to reinvest capital gains into Opportunity Funds will receive multiple capital gains tax benefits that will allow an investor to defer, reduce, and ultimately eliminate future capital gains.
1. Deferral of Capital Gains Taxes:
- Capital gains (short-term or long-term) from the sale of any asset that is reinvested in Opportunity Funds within 180 days following the disposition of that asset, shall be excluded from the investor’s gross income until the earlier of: December 31, 2026, or the date the investor sells his investment.
2. Elimination of Capital Gains Taxes for Investments in Opportunity Funds:
- Opportunity Fund investors are exempt from federal taxation on capital gains derived from the appreciation of their investment if the investment is held for at least 10 years.
I’M INTERESTED, LET’S GET STARTED
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