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Qualified Opportunity Zones were created by the 2017 Tax Cuts and Jobs Act. These zones are designed to spur economic development and job creation in distressed communities throughout all 50 States, the District of Columbia, and the five U.S. territories by providing tax benefits to investors who invest eligible capital into these communities.


An Opportunity Zone is generally an economically distressed community where new investments, under certain conditions, may be eligible for preferential tax treatment. Localities qualified as Opportunity Zones if they were nominated for that designation by the State or Territory and that nomination was certified by the U.S. Secretary of the Treasury via his delegation of that authority to the Internal Revenue Service. There are 8,764 Opportunity Zones in the United States, many of which have experienced a lack of investment for decades.

The Opportunity Zone tax incentive will spur capital investment and economic development in low-income communities. First, investors can defer the taxation of certain prior gains invested in a Qualified Opportunity Fund (QOF) until the earlier of the date on which the investment in the QOF is sold or exchanged, or December 31, 2026. Second, if the QOF investment is held for at least 5 years, 10% of the gain that was originally deferred is eliminated completely. If the QOF investment is held for at least 7 years, an additional 5% (15% total) of the original deferred gain is eliminated completely. Third, if the investor holds the QOF investment at least ten years, when the investor sells or exchanges the investment, the investor is eligible to eliminate the gain on the QOF investment from any increase in value of the QOF investment during the investor’s holding period.

Establishing a Qualified Opportunity Fund
Taxpayer Incentives
Investment Example
Final Opportunity Zone Rules from the Internal Revenue Service
Relevant Tax Forms
Securities and Exchange Commission Guidance

Taxpayer Incentives