Metro Atlanta Opportunity Zones
WHAT IS OPPORUNITY ZONES?
The Opportunity Zone (OZ) program was created to revitalize an economically-distressed community where new private investment, under certain conditions, may be eligible for preferential tax treatment. Simply put, OZs are an economic development tool designed to spur economic development and job creation in distressed communities. OZs were added to the tax code by the Tax Cuts and Jobs Act on December 22, 2017. The OZs are created through the process of nomination and designation. To qualify as OZs, localities must be nominated by the state and that nomination must be certified by the Secretary of the U.S. Treasury via his delegation of authority to the Internal Revenue Service. The first set of OZs, covering parts of 18 states, was designated on April 9, 2018. There are more than 8700 OZs covering parts of all 50 states, the District of Columbia, and five U.S. territories.
Opportunity Zones offers three tax incentives for investing in distressed communities via an Opportunity Fund.
Metro Atlanta Opportunity Zone Prospectus
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Important links:
Tax Credit Program
DRAFT Released 10/30/19
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IRS Proposed Regulations
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1 Temporary Gain Deferral
A temporary deferral of inclusion in taxable income for capital gains reinvested into an Opportunity Fund. The deferred gain must be recognized on the earlier of the date on which the opportunity zone investment is disposed of or December 31, 2026.
2 Step up in Basis
A step-up in basis for capital gains reinvested in an Opportunity Fund. The basis is increased by 10% if the investment in the Opportunity Fund is held by the taxpayer for at least 5 years and by an additional 5% if held for at least 7 years, thereby excluding up to 15% of the original gain from taxation.
3 Permanent Exclusion
A permanent exclusion from taxable income of capital gains from the sale or exchange of an investment in an Opportunity Fund if the investment is held for at least 10 years. This exclusion only applies to gains accrued after an investment in an Opportunity Fund.