Opportunity Zone Incentives

Opportunity Zones are a federal initiative designed to promote private investment in under-developed zones in all 50 states. Investment incentives include deferral of capital gains for up to seven years, opportunities for a step-up in basis on deferred gains, and ten years of tax-free growth for Opportunity Zone investments. These incentives create compelling upside for investments that meet Opportunity Zone criteria.

Capital Gain Deferral until 2026

Investors receive up to 7 years of deferral on capital gains invested in Opportunity Zones. Any capital gain is eligible for deferral — including both short- and long-term gains from sale of stock, property, or other investments. Gains must be re-invested in an Opportunity Zone fund within 180 days of recognition to be eligible for deferral.

Step-up in Basis

Investors receive up to a 15% step-up in basis on the deferred capital gains invested in an Opportunity Zone fund.

A 10% step-up in basis after 5 years of investment in an Opportunity Zone fund.

Another 5% step-up in basis after 7 years of investment in an Opportunity Zone fund.

10+ years of tax-free growth

Investors can sell or exchange their investment tax-free after 10 or more years in an Opportunity Zone fund. IRS rules allow Opportunity Zone investors to elect a step-up in basis to the fair-market value of the investment at the time of a sale, resulting in tax-free depreciation recapture and investment growth for the entire investment period.

 

Have a Project Site in mind? Use our interactive map to search Opportunity Zone tracts and see whether it could qualify for these lucrative incentives.