QUALIFIED OPPORTUNITY ZONE (QOZ) PROGRAM

•    The Tax Cuts and Jobs Act (TCJA) created the Opportunity Zones program to increase investment in economically distressed communities

•    The program provides preferential capital gains treatment for investments within designated low-income census tracts

•    The first is temporary tax deferral on any capital gains reinvested in a QOF within 180 days of realization

•    The second benefit is a 10 percent step-up in basis for capital gains reinvested in a QOF if the investment is held for five years

•    The basis is increased an additional 5 percent for any investments held for seven years

•    This step-up in basis means taxpayers can exclude up to 15 percent of the value of their reinvested capital gains from their taxable income

•    Finally, QOF investors can permanently exclude from taxation any capital gains that accrue after their investment in a QOF, if the investment is held for at least 10 years