Opportunity Zones were added to the tax code by the Tax Cuts and Jobs Act on December 22, 2017.An Opportunity Zone is an economically-distressed community where new investments, under certain conditions, may be eligible for preferential tax treatment. Branson, MO has a prime Opportunity Zone that was nominated for that designation by the State of Missouri and certified by the Secretary of the U.S. Treasury. Ours is within the first set of Opportunity Zones, covering parts of 18 states, that were designated on April 9, 2018.
Opportunity Zones are designed to spur economic development by providing tax benefits to investors.
First, investors can defer tax on any prior gains reinvested in a Qualified Opportunity Fund. Second, if the investor holds the investment in the Opportunity Fund for at least ten years, the investor would be eligible for an increase in basis equal to the fair market value of the investment on the date that the investment is sold or exchanged.
To become a Qualified Opportunity Fund, an eligible taxpayer self certifies. (Thus, no approval or action by the IRS is required.) To self-certify, a taxpayer merely completes a form (which will be released in the summer of 2018) and attaches that form to the taxpayer’s federal income tax return for the taxable year. (The return must be filed timely, taking extensions into account.)