Opportunity Zones are a bipartisan provision of the Tax Cuts and Jobs Act of 2017 championed by Senators Tim Scott (R-SC) and Cory Booker (D-NJ).
The legislation is designed to encourage & incentivize investors to redeploy and invest capital into low-income communities.
"Opportunity Funds" managed by professionals are currently being formed for the purpose of investing directly into low-income communities designated Opportunity Zones. Individuals may also form, fund and self manage an Opportunity Fund via a straightforward "self-certification" process.
Opportunity Zones have no detrimental effect on state or local tax revenue. The goal is to increase investment in low-income communities to solidify and strengthen the state and local tax base!
The tax provision provides three (3) main benefits to an investor in an Opportunity Zone. The tax benefits include the following: (1) temporary tax deferral, (2) basis "step-up," and (3) permanent exclusion of gain.