In December 2017, Congress passed the Tax Cuts and Jobs Act, which, among many other wide-ranging tax reforms, established a new program promoting long-term investments in low-income areas, with the goal of stimulating development in these economically distressed communities.
This program enables taxpayers to postpone and potentially decrease the tax on federal capital gains by re-investing the capital gains in “Qualified Opportunity Funds” that invest 90% of their assets in certain low-income communities designated as “Qualified Opportunity Zones.” In addition, gains on investments in these funds can be tax-free if the investment is held for more than 10 years.
Tarter Krinsky & Drogin has a multidisciplinary team consisting of lawyers from our Tax, Real Estate and Corporate practice groups to assist fund sponsors, developers, innovators and investors determine the right approach, implementation and realization of the full investment potential of the opportunity zones program into their business strategy while ensuring compliance with the program’s legal requirements.
We assist clients in structuring deals to maximize the tax benefits of investing in qualified zones, offering insights that optimize the full extent of the Opportunity Zones program, including: