Opportunity Zone projects can be a win-win for communities, investors, and project sponsors.
Project Sponsors or Developers
Subject to applicable “related-party” rules, you can use your own realized capital gains to enjoy significant capital gain tax benefits by either (i) investing in a Qualified Opportunity Fund or (ii) creating your own Qualified Opportunity Fund to invest in an Opportunity Zone project. Your project can receive equity investment from one or more Qualified Opportunity Funds.
When aligned with community needs and assets, Opportunity Zone projects can promote long-term economic development, incentivize business creation and expansion, increase job offerings and reduce community blight.
You can defer the payment of capital gains tax if you invest your capital gains in a properly structured and operated Qualified Opportunity Zone. You can also receive a step-up in basis that reduces tax on your original deferred gain. If you hold your investment in a Qualified Opportunity Fund for at least 10 years, you can exclude tax on new gain earned on your original investment.