The Opportunity Zone (OZ) program was created to help economically disadvantaged communities by providing tax incentives for private investments in those areas. These low-income communities have struggled while much of the rest of the country has grown. According to the Economic Innovation Group’s research, there are approximately 50 million Americans that live in communities that are struggling to attract investments and sustain economic opportunity for their residents. The country’s distressed zip codes contained 1.4 million fewer jobs in 2016 than they did in 2007. Through private investment, the hope is that jobs, new businesses, improved housing options, and general revitalization of these distressed communities will occur. As an incentive to get businesses involved in OZs, the federal government provides capital gains tax deferrals for any entities investing in OZs and no capital gains tax for gains earned from the OZ investment.
There are a number of common misconceptions about the Qualified Opportunity Zone (QOZ) Program. To help clarify speculation and misunderstandings, we’ve put together five of the most common misconceptions.
Designated Qualified Opportunity Zones (QOZs) are located in all 50 states plus six territories. The specific low-income census tracts that became designated as QOZs were selected by state governors in 2018 and certified by the U.S. Department of the Treasury. There are now 8,766 individual census tracts designated as QOZs across the country.
Opportunity zones (OZs) provide an opportunity to invest capital gains in real estate while deferring tax payment on those gains. It’s important to know which capital gains are eligible. Otherwise, you might invalidate your OZ (opportunity zone) tax benefits. In this article, we’ll dig into the details of what makes an eligible opportunity zone capital gain.
Eligible qualified opportunity funds (QOFs) got a boost from the federal government with a 24-month extension for deploying working capital. This is on top of the 31-month working capital safe harbor (WCSH) that is included in the program regulations. To better understand how and where the 24-month extension applies, let’s first go over the 31-month WCSH.
Qualified Opportunity Zones (QOZs) are not right for everyone. Despite the numerous potential benefits, like any investment, there is no perfect solution. Before investing in QOZs, you should consider the following elements and decide if QOZs are right for you.
Now that Qualified Opportunity Zone (QOZ) regulations are getting finalized, investments are beginning to pick up steam, and QOZ funds are generally mirroring non-QOZ real estate development funds. A report from Novogradec shows, as of the beginning of January, that QOZ funds have raised more than $6.7 billion, which is a 50% increase from just a month ago.
The Qualified Opportunity Zone (QOZ) program has attracted a lot of congressional attention in recent months, including several legislative proposals. How should current or potential future investors in QOZs view these proposals? In this article, we will discuss some of the recent developments and the possible ramifications.
Qualified Opportunity Zone (QOZ) investments are among the highest risk opportunities available for real estate investment. It is essentially ground-up development in unproven locations. There are a few apparent major risks, such as development completion and lack of liquidity, but investors should also consider the more hidden risks that these opportunities may contain before making their investments.
In December 2017, the Opportunity Zones incentive program was introduced as part of the Tax Cuts and Jobs Act. Two years later, the U.S. Department of the Treasury and IRS introduced their third — and final — list of rules focused on owning, developing, and operating within federally designated Qualified Opportunity Zones (QOZs). The goal of December 2019 guidance was to combine the first two tranches -- issued in October 2018 and May 2019.