Opportunity Zones are low-income areas the U.S. Treasury classifies as “Qualified opportunity zones.” Investors can make these asset investments through Qualified Opportunity Funds.
The investments are geared to accelerate economic development in almost 9,000 designated areas in America and Puerto Rico, says tax attorney Steve Moskowitz, a founding member of the San Francisco-based tax law firm Moskowitz L.L.P.
Opportunity Zones were added as part of the 2017 Tax Cuts and Jobs Act. According to the Economic Innovation Group, the 2017 tax provision provides “a tax incentive for investors to re-invest their unrealized capital gains into dedicated Opportunity Funds.”
African American Sen. Tim Scott played an integral part in including the zones in the tax law. These advocates foresee rising prices for housing or other new real estate development in targeted Opportunity Zones forcing current residents to leave those areas.
The NJRA will meet with local mayors to advise them on leveraging Opportunity Zones to generate projects that directly impact the people who need them most. In order to invest in an Opportunity Zone, Anderson says an investor must create a Qualified Opportunity Zone Fund, which is any investment vehicle organized as a corporation or partnership with the specific purpose of investing in Opportunity Zone assets. Erson says it is important for black investors to know that they can pool their resources and form a Qualified Opportunity Zone Fund, something the NJRA can assist with.