Federal Opportunity Zone
Opportunity Zones are designed to spur economic development by providing tax benefits to investors. First, investors can defer tax on any prior gain invested in a Qualified Opportunity Fund (QOF) until the earlier of the date on which the investment in a QOF is sold or exchanged, or December 31, 2026. If the QOF investment is held for longer than 5 years, there is a 10% exclusion of the deferred gain. If held for more than seven years, the 10% becomes 15%. Second, if the investor holds the investment in the Opportunity Fund for at least ten years, the investor is eligible for an increase in basis of the QOF investment equal to its fair market value on the date the QOF is sold or exchanged.
For more information on the benefits of the Federal Opportunity Zone, please visit https://www.irs.gov/newsroom/opportunity-zones-frequently-asked-questions.