Learn About the Opportunity Zones Program

Learn About the Opportunity Zones Program

What is the Opportunity Zone Program?

The Opportunity Zones program is an economic development initiative enacted by Congress as part of the Tax Cuts & Jobs Act on December 22nd, 2017. The program was created to promote investment in specific rural and urban communities known as Opportunity Zones. The program offers attractive tax benefits to investors that incentivize them to invest their capital gains into real estate and/or businesses within Opportunity Zones.

Prior to the Opportunity Zones Program, if you have invested in stocks, real estate or other assets that have appreciated in value, you could not sell those assets without paying huge taxes. Now, by investing in a qualified opportunity fund you can sell your asset and defer your original capital gain until the end of 2026. You can also receive a discount on your original capital gains expense and have the ability to permanently exclude the gains from your fund investment from taxation.

What are Opportunity Zones?

Opportunity Zones are specific census tracts (roughly 20% of each state) nominated by the governor of each state that qualify for investment in business or property through Qualified Opportunity Funds. View a map of Opportunity Zones across the USA.

What are Qualified Opportunity Funds?

Qualified Opportunity Funds are unique investment vehicles that enable investors to take advantage of new tax incentives incorporated invest in businesses and property located in Opportunity Zones.

What are the Opportunity Zone Investor Incentives?

Specific tax incentives are offered to tax payers that invest their capital gains into Qualified Opportunity Funds based on the length of time their investment is held. These tax incentives include:

Defer your capital gains until 2026

By investing in a qualified opportunity fund you can defer your original capital gains until December 31st, 2026, or when your Opportunity Fund investment is sold.

5-7 year hold: Discount on your original capital gains

Exclude 10% of your original capital gain from taxation if you hold your investment for at least 5 years. Exclude 15% of your gain if you hold for at least 7 years.

10 year hold: 100% Tax Free Gains on Fund Investment

If you hold your Opportunity Fund investment for at least 10 years, all of your gain from that reinvestment is 100% tax free (permanent exclusion of capital gains).