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

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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.

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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