- An Opportunity Zone is an area targeted for economic development activity, where new investments, under certain conditions, may be eligible for preferential tax treatment.
- Opportunity Zones were added to the tax code by the Tax Cuts and Jobs Act on December 22, 2017.
- Opportunity Zones are designed to spur economic development by providing tax benefits to investors. First, investors can defer tax on any prior gains until the earlier of the date on which an investment is sold or exchanged, or December 31, 2026, so long as the gain is reinvested in a Qualified Opportunity Fund. Second, if the investor holds the investment in the Opportunity Fund for at least ten years, the investor would be eligible for an increase in basis equal to the fair market value of the investment on the date that the investment is sold or exchanged.
- A Qualified Opportunity Fund is an investment vehicle that is set up as either a partnership or corporation for investing in eligible property that is located in an Opportunity Zone and that utilizes the investor’s gains from a prior investment for funding the Opportunity Fund.
For more information on Opportunity Zones please visit: https://www.irs.gov/pub/irs-drop/rp-18-16.pdf to review the IRS Rules and Regulations or contact the Sumter County Economic Development office.