What are Opportunity Zones?

Opportunity Zones are census tracts in economically distressed communities that qualify for the Opportunity Zone program per the 2017 Tax Cuts and Jobs Act.

More than 8,700 Opportunity Zones have been designated across the U.S., Puerto Rico, and four additional U.S. territories.

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We'll help you navigate the waters

The Opportunity Zone code section is incredibly complex and still evolving, so we’re staying on top of developments to keep you up-to-date.

We’ll continue to draw on our experience working with real estate developers and private equity funds to provide value-added insights as we guide you through the process.

Opportunity Zones 101

Let us break it down for you

Why were Opportunity Zones created?

The Investing in Opportunity Act was established to bring financial investments to distressed communities through housing development and new businesses.

How do you invest in an Opportunity Zone?

Investments in Opportunity Zones must be made through an investment vehicle certified as a Qualified Opportunity Fund (QOF). QOFs can be either closely held, or more akin to traditional private equity investment funds.

What are the tax benefits of investing in an Opportunity Zone?

Taxes on capital gains invested within 180 days into a QOF are deferred until the earlier of when the investment is sold or December 31, 2026.

  • If an investment is held for 5 years before December 31, 2026, then 10% of the gain is excluded permanently.
  • If the investment is held for 7 years, then 15% of the gain is excluded permanently.
  • And if the investment is held for more than 10 years, appreciation on the initial investment can be tax free.

It’s important to note that this is a federal tax provision. States and localities may not all follow the federal rule.

Who can benefit from Opportunity Zones?

  • Business owners looking to start or expand businesses inside an Opportunity Zone
  • Developers with existing or potential projects inside Opportunity Zones
  • Investment Funds looking to invest in real estate or start-up businesses located inside of Opportunity Zones
  • Investors with unrealized or realized capital gains from sales of businesses, securities, or real estate
  • Owners of buildings inside of Opportunity Zones
  • Owners of land inside Opportunity Zones

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Avante Group LLC

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Urban Asset Advisors LLC

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