Opportunity Zones

The Tax Cuts and Jobs Act created Opportunity Zones to stimulate investments in distressed communities across the United States. States, D.C., and U.S. possessions were given the opportunity to nominate low-income communities to be designated as Qualified Opportunity Zones. New investments in Opportunity Zone areas are eligible for preferential tax treatment.Opportunity Zones allow individual and corporate investors to defer capital gains taxes when they reinvest their earnings in these communities. Additional incentives accrue over five, seven and ten years that the investment is maintained, promoting the type of long term capital that is needed in distressed communities.

What are Opportunity Zones?

Opportunity Zones are made up of low-income community census tracts (and a few adjacent census tracts). Each state’s governor received the opportunity to nominate up to 25% of its low-income community tracts to receive the Opportunity Zone designation.

There are currently trillions of dollars worth of unrealized gains in the capital markets. If even a portion of those gains are moved to invest in distressed communities, it could have a transformative impact.

Members of The Opportunity Roundtable, a bipartisan organization, have been engaged with investors, communities, and policymakers to grasp and provide insight on how the Opportunity Zone program could catalyze the impact of private capital investments in low income and distressed communities. If you would like to be involved, please contact us.

“I am very excited about the prospects for Opportunity Zones. Attracting needed private investment into these low-income communities will lead to their economic revitalization, and ensure economic growth is experienced throughout the nation.”

- Secretary Steven T. Mnuchin

Benefits of Opportunity Zones?

Qualified Opportunity Zones retain this designation for 10 years. Investors can defer tax on any prior gains until December 31, 2026, as long as the gain is reinvested in a Qualified Opportunity Fund; an investment vehicle organized to make investments in businesses located in Opportunity Zones. Opportunity Zone investments held for ten or more years are not subject to additional capital gains tax on earnings.

There are currently trillions of dollars’ worth of unrealized gains in the capital markets. If even a portion of those gains are moved to invest in distressed communities, it could have a transformative impact.

Members of The Opportunity Roundtable, a bipartisan organization, have been engaged with investors, communities, and policymakers to grasp and provide insight on how the Opportunity Zone program could catalyze the impact of private capital investments in low income and distressed communities. If you would like to be involved, please contact us.

“I am very excited about the prospects for Opportunity Zones. Attracting needed private investment into these low-income communities will lead to their economic revitalization, and ensure economic growth is experienced throughout the nation.”

- Secretary Steven T. Mnuchin

The Research

Nearly 35 million Americans live in the communities designated as Opportunity Zones. According to data from the 2011-2015 American Community Survey, the designated census tracts had an average poverty rate of over 32-percent, compared with a rate of 17-percent for the average U.S. census tract.

Additionally, the median family income of the designated tracts were on average 37 percent below the area or state median, and had an unemployment rate of nearly 1.6 times higher than the average U.S. census tract.  Qualified Opportunity Zones were also twice as likely as other U.S. communities to be located within a persistent poverty county, meaning the county had experienced a poverty rate of at least 20 percent for 30 years.

There are currently trillions of dollars’ worth of unrealized gains in the capital markets. If even a portion of those gains are moved to invest in distressed communities, it could have a transformative impact.

Members of The Opportunity Roundtable, a bipartisan organization, have been engaged with investors, communities, and policymakers to grasp and provide insight on how the Opportunity Zone program could catalyze the impact of private capital investments in low income and distressed communities. If you would like to be involved, please contact us.

“I am very excited about the prospects for Opportunity Zones. Attracting needed private investment into these low-income communities will lead to their economic revitalization, and ensure economic growth is experienced throughout the nation.”

- Secretary Steven T. Mnuchin

35

million Americans live in Opportunity Zone Communities

54

percent of U.S. distressed zip codes had fewer jobs and businesses in 2015 than in 2000

56

percent of people living in distressed communities are minorities

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