Qualified Opportunity Zones

Qualified Opportunity Zones

Qualified Opportunity Zones

If you're an investor looking to make a difference in the community or want to diversify your portfolio, you may want to explore the tax benefits of long-term investment in low-income communities.

The Qualified Opportunity Zone (QOZ) program creates opportunities for investors to defer the capital gains tax on qualifying investments in economically-distressed communities. More significantly, it provides tax-free appreciation on an opportunity zone investment if held for more than 10 years. To receive the program's full benefits, however, certain compliance conditions must be met on both the fund side and the business side. Further complicating matters is the updated QOZ regulations the IRS has released in the years since the tax reform law put the program into effect.

Our team brings an in-depth understanding of the QOZ program rules, including how ongoing updates to the IRS guidance affect you. We help investors, QOZ funds, and businesses meet compliance requirements while informing your strategy on how to best capitalize on the opportunities in the program.

The tax reform law’s Qualified Opportunity Zone program is gaining popularity, but individuals, business operators, and real estate developers who are looking to take advantage of the program’s benefits should note that both the Qualified Opportunity Zone Funds and the businesses they support come with compliance requirements for 2020. The following gives a preview of what to expect.

Opportunity zones provide one of the greatest tax deferral vehicles in the tax reform law commonly known as the Tax Cuts and Jobs Act (TCJA). However, the rollout of investment opportunities in qualifying funds has been hampered by confusion and uncertainty.

Biden's proposed changes to capital gains taxes could affect qualified opportunity zone investments.

Sean Haggerty