Opportunity Zones are designated geographic areas that are intended to encourage economic development and job creation in distressed communities. These zones were created as part of the Tax Cuts and Jobs Act of 2017, and provide special tax incentives to investors who make investments in qualifying businesses or real estate projects located within these zones. These zones are specific geographic areas that have been identified as economically distressed and in need of revitalization.
The tax incentives through Opportunity Zones could include:
- Temporary deferral of capital gains taxes for investors who reinvest capital gains in Opportunity Zone investments within 180 days.
- A step-up in basis for capital gains invested in Opportunity Zones, which can result in a reduction in taxes owed on the original investment.
- Permanent exclusion of capital gains taxes on investments held for at least 10 years.
City to City works side by side with its Clients and Investors to source these types of zones and ensure criteria can be met for these kinds of investments.