Opportunity Zones, enacted as part of the Tax Cuts and Jobs Act of 2017, encourage long-term investments in low-income urban and rural communities across the U.S. A new tool for investors, asset owners, asset managers and communities, Opportunity Zones provide a tax incentive for investors to re-invest unrealized capital gains into Opportunity Funds.
Section 1400Z-2 provides three main tax incentives to encourage investment in Qualified Opportunity Zones:
- Deferral of taxes on capital gains to the extent that such capital gains, or portion thereof, are reinvested in a QOF
- Permanent elimination of taxes on a portion of capital gains to the extent such capital gains remain invested in a QOF for specified periods of time
- Eliminates taxes on the post-acquisition appreciation on investments in QOFs that are held for at least 10 years
Kutak Rock, a national leader in tax-incentivized financing and investment, is working diligently to assist clients with this new tax incentive and applying our decades’ of experience to helping clients navigate the Opportunity Zone program and process and structuring transactions that help clients take advantage of tax incentives provided by the program.
Our full-service Opportunity Zone team consists of attorneys located in offices coast to coast. The team is well-equipped to address each aspect of the Opportunity Zone process and create custom solutions for fund managers, asset owner or managers, investors, or those seeking to receive investments.