Opportunity Zones

Opportunity Zones were created by the Tax Cuts and Jobs Act of 2017 to incentivize long-term private investment in designated communities in need of capital investment. The policy provides substantial tax benefits to investors who invest a realized capital gain into an Opportunity Zone Fund.

Upon realizing a capital gain, investors have 180 days to invest their gain in an Opportunity Fund. By investing in Opportunity Zones through a Qualified Opportunity Fund, investors receive the following benefits:

  • Year 0: Capital gain is invested into an Opportunity Zone Fund.  Deferral of capital gains tax liability until the earlier of investment exit or December 31, 2026.
  • Year 7: 15% Step-up in basis.  If $100 of capital gains is invested, the investor will owe tax on $85.
  • Year 10: Upon sale of the asset, the investor receives a step-up in basis to Fair Market Value so all post-investment appreciation is tax free after 10 years. If the $100 investment is now worth $200, the $100 of appreciation is not subject to capital gains taxation upon disposition

Investment Comparison