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OPPORTUNITY ZONE

Great opportunities await in Hart!  As a designated Opportunity Zone, incentives are available for capital investments in low-income communities nationwide. There are three types of tax incentives that relate to the treatment of capital gains, each of the incentives are connected to the longevity of an investor’s stake in a Qualified Opportunity Fund (QOF) that provides the most upside to those who hold their investment for 10 years or more.

A QOF is an investment vehicle set up as a partnership or corporation for investing in eligible property located in a Qualified Opportunity Zone.  Investors who invest in a QOF are eligible to benefit from a reduction in tax liability on realized capital gains in one of several ways:

  • Deferral: Investors can defer tax on any prior gains that are reinvested in a QOF until the earlier of the date on which the investment is sold or exchanged, or December 31, 2026.

  • Partial Forgiveness:  QOF investments held for five (5) years or longer receive a 10% reduction on the deferred gain; if held for seven (7) years or longer, the reduction increases to 15%.

  • Full Forgiveness: Investments held for at least 10 years are exempt from capital gains taxes on the potential profits from the QOF.

Investors should consult with a tax attorney with a specialization in Opportunity Zones before making an investment. 

 

LINKS

Opportunity Zone Fund Directory

How to Get Your Project Funded