In December 2017, as part of the Tax Cuts and Jobs Act, Congress created a new tool for community development in the form of tax incentives to invest in qualified opportunity zones through qualified opportunity zone funds under Section 1400Z-2 of the Internal Revenue Code.

Section 1400Z-2 provides two compelling tax incentives to encourage investment in qualified opportunity funds. First, investors can defer paying taxes on gains from the sale or exchange of appreciated assets by investing such gains into opportunity zone funds within 180 days following such sale or exchange. Such gains may be deferred until the earlier of (i) when the investment is sold or exchanged or (ii) December 31, 2026.

Click for the full client alert: Opportunity Zone Tax Incentives = Higher Investment Returns