New Tax Incentives for Investors

  • 2017 Tax Reform Act includes a new tax incentive - IRS Subchapter Z - Opportunity Zones

  • Goal to inject capital into low-income communities and promote long term economic growth

  • Specific census tracts nominated by governors of all 50 states for designation as Opportunity Zones

  • Federal certification of Opportunity Zones finalized on May 18, 2018

  • Investors must invest through newly created "Opportunity Funds" 

    • Opportunity Funds may purchase and improve real estate​

    • Opportunity Funds may also purchase or invest in existing businesses that qualify as Opportunity Zone Businesses​

  • Investors must invest capital gains from any existing investments into an Opportunity Fund ​

  • Investment recognizes a reduction and deferment of capital gains taxes

    • If held for 5 years, tax basis of original investment increased by 10%​

    • If held for 7 years, tax basis of original investment increased by 15%

  • After 10 years, post acquisition gains are permanently exempt from capital gains taxes​

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