OPPORTUNITY ZONE

Opportunity Zones were established by congress in the Tax Cuts and Job Act of 2017. OZs are low income census tracts nominated by the Governor and certified by the U.S. Department of Treasury into which investors can utilize capital gains dollars to finance new projects and enterprises.

Incentives offered to investors:

  • Temporary Tax Deferral – Applies only to capital gains reinvested into Opportunity Zone, only recognized through the earlier of the sale of the investment or December 31, 2026
  • Step-Up in Basis – The basis of the original investment is increased depending on the length that the investment is held. Step-up of 10% if the investment in the qualified opportunity zone fund is held for at least 5 years.  An additional step-up of 5% if held for at least 7 years.
  • Permanent Exclusion from Capital Gains Tax – Opportunity Zone Investments held for at least 10 years are permanently excluded from playing capital gains tax upon the sale of that investment.  This exclusion applies to the gains accrued from an investment in an Opportunity Fund, not the original gains