Opportunity zones: Help for poor or tax cut for rich?
Article from ModernCities.com
JACKSONVILLE, Fla. – Could an influx of private sector investment fuel long-needed economic growth into our most distressed neighborhoods? Or will a new community development program designed to drive private investment to certain areas simply advance the negative impacts of displacement and gentrification?
What is an Opportunity Zone?
According to research one in six Americans live in economically distressed communities. As a result, the country’s economy is dependent on a handful of communities for growth. At the same time, in stocks and mutual funds alone, U.S. investors hold trillions of dollars in unrealized capital gains. Viewing unrealized capital gains as a significant untapped economic development resource.
With this in mind, as a part of the Tax Cuts and Jobs Act of 2017, Congress has established a new community development program now known as Opportunity Zones to drive long-term private sector investment into low-income urban and rural communities nationwide.
Through private sector investment vehicles that invest at least 90 percent of their capital in these Opportunity Zones, called Opportunity Funds, investors can receive a variety of tax incentives on their unrealized capital gains, ranging from temporary tax deferral to permanent exclusion from taxable income of capital gains from the sale or exchange of an investment.