Definition
An investment in property located in federally designated Opportunity Zones that provides significant capital gains tax benefits to investors.
Not sure where this fits?
Answer a few questions and we’ll open the path that fits, at the right step.
Find my pathAbout this term
Opportunity Zone investments allow investors to defer and reduce capital gains taxes on qualifying investments. If held for 5 years, investors gain a 10% step-up in basis. If held for 7 years, the step-up increases to 15%. If held for 10 years, gains on the Opportunity Zone investment itself become tax-free. These incentives encourage investment in economically distressed areas. Opportunity Zones are designated by state governors and must meet specific criteria. Investments must be made through qualified opportunity funds.
Pro Tip
Research Opportunity Zones in your area to identify investment opportunities with significant tax benefits.
Example
An investor placed a $500,000 capital gain into an Opportunity Zone fund, deferring the tax and receiving a 10% basis increase after 5 years.