Five Years In, Opportunity Zones are Hitting Their Stride
December 7, 2022 | Beth Mattson-Teig | WealthManagement.com
When the Tax Cuts and Jobs Act of 2017 put in place new tax incentives for investors tied to Opportunity Zones, no one was quite sure how well the new structure would take off. The early days were marked by a frenzy of sponsors jumping into the space—and plenty of critics who were skeptical that the tax incentive program would work. However, five years in, the sector is proving that it can both attract capital and deliver economic development to underserved communities.
Opportunity Zones (OZ) are defined as an economic development tool that allows people to invest in distressed areas in the United States. Their stated purpose is to spur economic growth and job creation in low-income communities while providing tax benefits to investors. Investors can defer tax on any prior eligible gains by buying into OZ funds with deferral benefits varying based on the length of the fund.
