WHAT IS AN OPPORTUNITY ZONE?
An Opportunity Zone is an economically-distressed community where new investments, under certain conditions, may be eligible for preferential tax treatment. Localities qualify as Opportunity Zones if they have been nominated for that designation by the state and that nomination has been certified by the Secretary of the U.S. Treasury via his delegation of authority to the Internal Revenue Service
HOW WERE OPPORTUNITY ZONES CREATED?
Opportunity Zones were added to the tax code by the Tax Cuts and Jobs Act on December 22, 2017.
HOW DO OPPORTUNITY ZONES SPUR ECONOMIC DEVELOPMENT?
Opportunity Zones are designed to spur economic development by providing tax benefits to investors. First, investors can defer tax on any prior gains invested in a Qualified Opportunity Fund (QOF) until the earlier of the date on which the investment in a QOF is sold or exchanged, or December 31, 2026. If the QOF investment is held for longer than 5 years, there is a 10% exclusion of the deferred gain. If held for more than 7 years, the 10% becomes 15%. Second, if the investor holds the investment in the Opportunity Fund for at least ten years, the investor is eligible for an increase in basis of the QOF investment equal to its fair market value on the date that the QOF investment is sold or exchanged.
What is an Opportunity Fund?
An investment vehicle that is organized as a corporation or a partnership for investing in Opportunity Zone projects or sites. An opportunity fund must hold at least 90 percent of its assets in "Qualified Opportunity Zone Property." To qualify for these incentives, investments must be made through a qualified Opportunity Fund. Note: The U.S. Treasury provides rules and guidelines on how to become certified as a qualified Opportunity Fund
Is this the same thing as the GA State Opportunity Zone Jobs Tax Credit?
The State Opportunity Zone Tax Credit is an incentive program ran by the Georgia Department of Community Affairs. Please see here for more details on this job tax credit.
I am interested in learning more about Federal Opportunity Zones but I am located outside the City of Atlanta. Where can I go to learn more?
Please contact our partners at the following organizations: