Opportunity Zones Program - An Updated Overview of Program Details and What’s Ahead

2018
|   By
Rachel Reilly ,
Enterprise Community Loan Fund, Inc.
page one
Summary
Created as part of the 2017 tax reform deal, the Opportunity Zones Program is designed to drive long-term capital to distressed communities by providing tax benefits on investments in Opportunity Funds, or “O Funds”. This policy brief offers a high-level overview of the new program based on information derived from the enacting legislation (Tax Cuts and Jobs Act) and details offered by the Economic Innovation Group.
Description

Opportunity Funds are a new class of investment vehicles that aim to responsibly drive much-needed capital into rural and low-income urban communities. O Funds will activate passive holdings by connecting investors to investment opportunities located in newly designated Opportunity Zones.

This concept – originally introduced in the Investing in Opportunity Act (IIOA) – is the first new community development tax incentive program introduced since the Clinton Administration. The program will allow U.S. investors to receive a temporary tax deferral and other tax benefits when they reinvest unrealized capital gains into O Funds for a minimum of five years. Today, trillions of dollars in unrealized capital gains are held in stocks and mutual funds alone. This capital could soon be invested in O Funds to uplift local economies throughout the nation.

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