March 14, 2019: Written by Kent L. Schwarz, Esq. and Sarah L. Davis, Esq.
The Tax Cut and Jobs Act added new Section 1400Z to the Internal Revenue Code, which provides a valuable incentive for investing in so-called “Qualified Opportunity Zones” (“QOZ”). Opportunity Zones are economically deprived areas designated by each state. Under Section 1400Z, any taxpayer realizing a capital gain can defer or eliminate tax on the capital gain by investing all or a portion of the gain in a Qualified Opportunity Zone Fund (“QOF”). If the QOF investment is held for ten years, gain on the QOF investment is also eliminated, providing a powerful incentive to invest in a QOF.