Opportunity Zones

The Opportunity Zones Program was officially enacted as part of President Trump’s comprehensive tax reform plan via the Tax Cuts and Jobs Act which was passed in late December 2017. This act requests the Governor of each state to nominate up to 25 percent of eligible low-income census tracts as Opportunity Zones. Opportunity Zones are census tracks designated to provide a new tool for tax incentives, including a temporary deferral on capital gains taxes, when investors reinvest those gains in qualified Opportunity Funds. The funds must in turn invest in low-income communities from these designated census tracts (Opportunity Zones). These zones exist to spur new and small businesses, encourage development in blighted properties as well as a number of other activities intended to revitalize and enhance local economic ecosystems. The U.S. Department of Treasury is developing rules regarding the necessary qualifications of Opportunity Funds and eligible investments, which is being administrated by the Internal Revenue Service (IRS). To become a Qualified Opportunity Fund, an eligible taxpayer self certifies. There is no prior approval by the IRS required. This program is still new and it is anticipated that Treasury Department and the IRS will be providing further details over the next few months, such as additional legal guidance. For more information, please visit https://www.irs.gov/newsroom/opportunity-zones-frequently-asked-questions