Opportunity Zone Basics

Qualified Opportunity Zones were created by the 2017 Tax Cuts and Jobs Act, designed to spur economic development and job creation in distressed and low-income communities by providing a capital gains reinvestment mechanism that defers and reduces and excludes tax liability on gains from qualified investments.

An Opportunity Zone is a community that has been nominated by the stated and certified by the Treasury Department as qualifying for this program.

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Requirements:

• Investment in an Asset (real estate, business, infrastructure, etc.)

• The asset is located in an Opportunity Zone

• Capital originates from a recent capital gains

• Investment to occur before 2036

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Benefits:

• Tax liability payment deferral until 2026

• 10% step-up in basis if held a minimum of 5 years & invested by 2021

• 100% federal capital gains tax exclusion on sale, if held for a minimum of 10 years.

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Qualified Opportunity Zone Fund

Any investment vehicle which is organized as a corporation or partnership for the purpose of investing in qualified opportunity zone property that holds at least 90% of its assets in a qualified opportunity zone.

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Qualified Opportunity Zone Property

The three key funding structures that qualify for Opportunity Zones are as follows:

• Qualified Opportunity Stock

• Qualified Opportunity Zone Partnership

• Qualified Opportunity Zone Business Property