New Incentive to Invest in Distressed Communities

Types : Bylined Articles

“Qualified Opportunity Zones” were introduced just one year ago by the 2017 tax reform, the Tax Cuts and Jobs Act, creating a significant new income tax incentive for taxpayers to make investments in designated economically distressed communities. Each community was nominated by their respective state and certified by the Department of the Treasury as one of approximately 8,700 Qualified Opportunity Zones, nationwide. The new tax provisions, Internal Revenue Code Sections 1400Z-1 and 1400Z-2, provide for a deferral of capital gains realized on sales of capital assets, such as securities or precious metals, where an amount equal to such gain is reinvested in a “Qualified Opportunity Fund” within 180 days after the sale. The taxpayer may invest the return of principal as well as the recognized capital gain, but only the portion of the investment attributable to the capital gain will be eligible for the exemption from tax on further appreciation.

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To view the full article in the January issue of the Philadelphia Bar Reporter, please click here. The article can be found on page 11 and then continued on page 17.