On December 22nd, 2017, the Federal Tax Cuts and Jobs Act was signed into law with bipartisan support. This tax legislation established the Opportunity Zone (OZ) Program, a community investment tool providing new tax incentives to investors who support economic development initiatives within designated census tracts nationwide. 

Key components of the Program include OZs, Qualified OZ Funds, and OZ Projects.  OZs were designated by the U.S. Department of Treasury (Treasury), based on state nominations, as economically-distressed communities where new investments, under certain conditions, may be eligible for preferential tax treatment.   Qualified OZ Funds are investment vehicles organized for the purpose of investing in OZ Projects which are business and real estate development opportunities located within OZs. 

The OZ Program allows individual investors to place capital gains in Qualified OZ Funds.  In exchange for their investment, the individual receives certain federal capital gains tax advantages including a deferment of capital gains taxes and the elimination of taxes on returns from any OZ Fund investment held for at least ten years.  The Qualified OZ Fund uses investors' capital as an economic development tool to support and grow OZ Projects which can rejuvenate local economies; create jobs within the boundaries of economically-distressed communities designated as OZs; and drive additional economic development in the area. The OZ designation may create a lasting positive effect in some of our highest-need areas by helping bring new capital investment and more jobs to distressed communities.  When we empower economic development activities in distressed areas we are providing the groundwork to produce a more reliable and functioning community.

To read more about "Empowering Economic Development within Opportunity Zones", click here

For more information, visit the US Department of the Treasury's

Comments or questions about the program rules and guidelines can be directed to the IRS at 414-231-2240 or CC.ITA.Section.1400@irscounsel.treas.gov