The Opportunity Zone (OZ) program was enacted as part of the 2017 federal tax reform package. The incentive is a potential deferral, reduction or elimination of certain federal capital gains taxes when eligible investments are made within the identified OZ. This federal tax incentive program provides a new vehicle for private investors to support distressed communities through private equity investments in businesses and real estate ventures, etc.
IRS regulations for project eligibility are pending, but envisioned to include:
• Funding the development of workforce and affordable housing
• Investing in startup businesses who have the potential for rapid increases in scale and the ability to “export” outside of the state
• Funding new infrastructure to support economic and population growth
• Upgrading the capability of existing underutilized assets through capital improvement investments