For investors, opportunity zones come with several tax advantages. Capital gains invested in a certified fund-fund will not be taxed…
For investors, opportunity zones come with several tax advantages. Capital gains invested in a certified fund-fund will not be taxed at the end of 2026 or when the investment is sold, whichever comes first. Any gains from the fund are permanently shielded from taxes if the investment has been held for 10 years. In addition, initial investment will be discounted by up to 15 percent for tax purposes after seven years.
The guide comes only a few weeks before the mid-term election. The GOP has fought to sell its tax laws to voters as the party tries to stick to its majority.
The proposed regulations clarify that only capital gains are eligible for preferential tax treatment. Investors who can participate include individuals, companies, companies, REITs and real estate and trust. Treasury said that further guidance will be released before the end of the year, with final rules that will be available in the spring.
“We felt it was important to issue the core guidelines now as needed to get the money up and work and not wait until we have answered all the questions,” says a senior civil servant who refused to be named.