Opportunity zone

faq

Most frequent questions and answers

An opportunity zone is an economically-distressed community where new investments, under certain conditions, may be eligible for preferential tax treatment. Localities qualify as opportunity zones if they have been nominated for that designation by the state and that nomination has been certified by the Secretary of the U.S. Treasury via his delegation of authority to the Internal Revenue Service.

Opportunity zones were added to the tax code by the Tax Cuts and Jobs Act on December 22, 2017.

No, they are new. The first set of opportunity zones, covering parts of 18 states, were designated on April 9, 2018. opportunity zones have now been designated covering parts of all 50 states, the District of Columbia and five U.S. territories.

Opportunity zones are an economic development tool designed to spur economic development, affordable housing, and job creation in distressed communities.

Small Business Investment Companies supply small businesses with financing in both the equity and debt arenas. They provide alternative to venture capital firms for many small businesses seeking startup capital.

A Qualified Opportunity Fund is an investment vehicle that files either a partnership or corporation federal income tax return and is organized for the purpose of investing in Qualified Opportunity Zone property.

A small business investment company (SBIC) is  a type of privately-owned and managed investment company that is licensed and regulated by the Small Business Administration (SBA). An SBIC uses its own capital, plus funds borrowed with an SBA guarantee, to make equity and debt investments in qualifying small businesses.

No. You can get the tax benefits, even if you don’t live, work or have a business in an opportunity zone. All you need to do is invest a recognized gain in a Qualified Opportunity Fund and elect to defer the tax on that gain.

The list of designated Qualified Opportunity Zones can be found in IRS Notices 2018-48 (PDF) and 2019-42 (PDF). Further a visual map of the census tracts designated as Qualified Opportunity Zones may also be found at Opportunity Zones Resources.

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