CLIENT ALERT: Capitalizing on New Opportunity Zone Incentives to Spur Economic DevelopmentClient Alert
Created as part of the recently passed Tax Cuts and Jobs Act, “OPPORTUNITY ZONES” are designed to encourage long-term investments in underserved communities. By offering tax benefits to private investors who choose to invest their capital at the nexus of need and opportunity, the program supports a broad array of investments and presents an opportunity for creative problem-solving strategies to address community needs.
THE PROGRAM BENEFIT
The program offers investors tiered tax benefits depending on the term of the investment, including a temporary deferral and partial reduction of capital gains, as well as the potential to exclude capital gain tax from future appreciation on the investment. It is designed to tap into the estimated $6T+ of unrealized capital gains held by U.S. individuals and companies by incentivizing investors to re-invest that capital in low-income communities to spur economic development and job creation.
REQUIREMENTS FOR INVESTORS
In order to receive the entire 15% step-up in basis of the re-invested capital gain, which requires a full 7-year holding period prior to December 31, 2026, investors must make a qualifying investment by December 31, 2019. Detailed regulations have been recently issued to provide new and helpful guidance.
BMD IS HERE TO HELP YOU
Our advisors have extensive experience structuring investment transactions and are uniquely positioned to help you achieve your business objectives by exploring the possibilities available to you through the Opportunity Zones.