What is an Opportunity Zone?
Created by the Tax Cuts and Jobs Act of 2017, the Opportunity Zone program is designed to incentivize long-term capital investment to disadvantaged urban and rural communities nationwide.
The program provides tax incentives to investors who direct their capital gains into a Qualified Opportunity Fund, which then deploys capital into a designated Qualified Opportunity Zone. Ultimately, this provides the investor with both a tax deferral and potential for tax-free growth.
Who is eligible?
Eligible investors include any taxpayer that has capital gains. Investors must invest their capital gains in a “Qualified Opportunity Zone Fund” within 180 days of a realized capital gain event. Sixty West Funds currently offers Qualified Opportunity Zone Fund investment to certain qualified investors.
What are the Requirements of an Opportunity Fund?
Qualified Opportunity Zone Funds must hold at least 90% of assets located in OZs or stock/interest in qualified opportunity zone businesses (“QOZB”). QOZB’s are trades or businesses in which substantially all of the tangible property owned or leased are located in qualified OZs.
Current identified investment types in OZs are commercial real estate development or renovation, opening new businesses, expansion of businesses into OZs, or larger expansions of businesses already located in OZs.