Category: Tax Incentives
Opportunity Zones are an econimc development tool that is designed to spur economic development and job creation in certified communities. Under certain conditions, investments in developments within Central City may be eligible for preferrential treatment of federal taxes.
Per the IRS: Opportunity Zones are designed to spur econoimc developmen by provding 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 10 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. A QOF, Qualified Opportunity Fund, is an investment vehicle that is set up as either a partnership or corporation for investing in eligible property that is located in a Qualified Opportunity Zone, i.e. Central City.
To find out more about how you might be able to benefit from investing in Central City's Opportuity Zone, contact your accountant or visit the "IRS Opportunity Zone FAQ Page."