Background
The passage of the Tax Cuts and Jobs Act of 2017 created a new policy for Opportunity Zones that will have an incredible impact on the real estate industry for years to come. In April 2019, the United States Treasury Department released the long-awaited second round of proposed regulations related to the Opportunity Zone initiative. which was enacted as part of the Tax Cuts & Jobs Act of 2017.
For investors to receive the highest incentives in Opportunity Zones, they must make long term investments. The incentives are tax exemptions that increase every few years until the 10-year mark after which the investor is exempt from any capital gains taxes whatsoever. According to Ben Carson, the Secretary of the Department of Housing and Urban Development, the success of the policy relies on “the long term incentive to stay invested, and therefore to be interested in what happens with your investment.”