Opportunity Zones were added to the tax code by the Tax Cut and Jobs Act on December 22, 2017. The goal of this act was to attract private investment and create jobs identified in distressed communities. Unlike the limited availability of New Market Tax Credits, the funding for Opportunity Zones appear to be unlimited.
Investing in O-Zones enables investors to defer the capital gains tax on their investment for up to 10 years. In addition, if the investment is held for over 10 years, the appreciation on the investment at disposition is not taxed.
The opportunities for investors to defer capital gains from previously dispositioned investments back into real estate properties or other businesses are significant. However, the possibility of investing in qualified investment that when one day sold will have no tax on the appreciated value is enormous.
For more information or to discuss what this means for you as an investor or sponsor, please feel free to email me at firstname.lastname@example.org or call 410.782.0000 (x1).
NOTE: IRS guidelines are still pending as the program continues to evolve. Birchwood Capital Partners does not provide legal or accounting advice or services to clients.