Opportunity Zones

Department of Treasury, Community Development Financial Institutions Fund

Program Type:

Tax Incentive

Eligible Geography:

USA

Eligibility Map:

Map of Opportunity Zones

Program URL:

https://home.treasury.gov/news/press-releases/sm864

Summary:

An Opportunity Zone is an economically distressed community where new investments, under certain conditions, may receive preferential tax treatment. Through the establishment of Qualified Opportunity Funds (QOFs), private investors have the potential to defer tax on earlier capital gains by investing the amount of those gains in a QOF, and to eliminate tax on future capital gains in the QOF investment. The QOF, in turn, invests those funds in projects located in Opportunity Zones. QOFs may be an effective vehicle for infrastructure investments like broadband expansion.

Eligible Recipients:

For-Profit Business; Financial Institution

Eligible Recipients Detail:

Corporations and partnerships must organize each fund. Investors can do this by filing Form 8996.

Eligible Purpose:

Building Infrastructure; Last Mile Infrastructure; Broadband Enabled Devices; Anchor Institution Infrastructure

Eligible Purpose Detail:

Opportunity Zone regulations permit all capitalized improvements that increase the value of residential or commercial property to count towards substantial improvement requirement for Qualified Opportunity Fund Zone investment.

Other Eligibility Criteria:

Designated Low-Income Communities, which are Census Tracts, where:

-The poverty rate is at least 20%
-The median family income does not exceed 80% of the area median family income, or 85% in high migration rural counties
-The Census tract has a population less than 2,000 and is within a Federally Designated Empowerment Zone and is contiguoius to at least one other LIC.

Note/Additional Resources:

https://home.treasury.gov/system/files/136/Treasury-Opportunity-Zone-Final-Regulations-FAQ-12-19-19.docx

https://www.irs.gov/pub/irs-drop/td-9889.pdf

https://www.urban.org/policy-centers/metropolitan-housing-and-communities-policy-center/projects/opportunity-zones

https://www.cdfifund.gov/Pages/Opportunity-Zones.aspx

https://www.irs.gov/credits-deductions/opportunity-zones-frequently-asked-questions

Source:

https://www.ntia.doc.gov/report/2020/ABI_Progress_Report