What is an Opportunity Zone?
Established by Congress in the Tax Cuts and Jobs Act of 2017, the Opportunity Zone program incentivizes long-term, private investments in low-income urban and rural communities nationwide. With this program, any taxpayer – individual or corporation – is eligible to invest in Opportunity Funds. There is no cap on the amount that can be invested.
Opportunity Funds must be formed as a parternship or corporation and can be created by any person or entity. The Opportunity Fund is required to invest 90% of its assets in qualified Opportunity Zones in the form of stock, partnership interest, or business property.
What are the Investor Benefits in an Opportunity Zone?
Investors can realize significant federal tax benefits by way of tax deferral, reduction and elimination.
- A Temporary Deferral: When capital gains from the sale of other assets such as stocks or real estate are invested in an Opportunity Fund, the tax on the capital gain is deferred until the earlier of the disposition of the Opportunity Fund investment or December 31, 2026.
- A Reduction: The original amount of capital gains on which an investor has to pay deferred taxes is reduced by 10% if the Opportunity Fund is held for 5 years and reduced by another 5% if held for 7 years.
- An Exemption: Any capital gains on the Opportunity Fund will be excluded from taxation if the investment is held for at least 10 years.
Where is Decatur’s Opportunity Zone?
Click here and zoom in to see a map of Decatur’s Opportunity zone. It is concentrated on the downtown area and the Main Street and Eldorado Street corridors. The area is roughly bounded by 22nd Street on the east, Garfield Street on the north, Lake Decatur to the south and Millikin University to the west. See sites and buildings on the market here.
Where can I find more resources?
We’re happy you asked. Check out these links to learn even more about Opportunity Zones.
Economic Innovation Group (EIG)
Council of Development Finance Agencies (CDFA)
Tax Incentives for Investing in Opportunity Zones (EIG)
NCSHA Opportunity Zone Fund Directory
Opportunity Zone Program Notice of Funding Opportunity