Opportunity Zones are designated areas that are considered distressed and would benefit from economic growth and development. Created as part of the Tax Cuts and Jobs Act of 2017, these zones provide tax incentives for some parties who invest their capital gains into qualifying projects and businesses in the designated areas.
There are currently 8,764 opportunity zones designed by the IRS in the United States. The zones are in metropolitan areas like Detroit and the Bronx, New York, and rural areas like those you see in Oregon.
Investments can be utilized for various purposes, such as commercial and residential real estate projects, small business development, infrastructure improvements, and job creation. The tax benefits associated with the Opportunity Zones program aim to attract investors to these areas and promote long-term investment.
By leveraging the tax advantages provided through the Opportunity Zones program, investors can hope to make a positive impact on the local economy, stimulate growth, and contribute to the revitalization of communities.
The city of Detroit has several designated Opportunity Zones. Once a thriving hub of the automotive industry, the state has faced significant economic challenges in the last few decades. The Opportunity Zones in Detroit provide an opportunity for investors to revitalize the city and support its resurgence.
The IRS has designated several neighborhoods in the South Side of Chicago as Opportunity Zones under the federal program. South Chicago has faced economic challenges and disinvestment in the past. The Opportunity Zones program aims to attract investment and stimulate economic growth in these distressed areas. Investors who choose to invest in the designated Opportunity Zones in the South Side might benefit from tax incentives and capital gains tax relief.
An example of a rural Opportunity Zone is the town of Enterprise, Oregon. Enterprise is a small rural community in Wallowa County, in the northeastern part of the state. The IRS has designated it as an Opportunity Zone under the federal program.
With Enterprise, investments made in the Opportunity Zone could be directed towards various initiatives such as agricultural projects, small business development, renewable energy projects, tourism, or other industries that support the local economy.
Rural Opportunity Zones are intended to attract investment and economic development to underserved rural areas. By designating certain areas as Opportunity Zones, policymakers aim to stimulate job creation, infrastructure improvements, and overall economic growth in these rural communities.