James O. Lang, Shareholder, Tax, Greenberg Traurig will present on Qualified Opportunity Zones to the Tampa Downtown Partnership. The 2017 Tax Cuts and Jobs Act created a significant new economic development tool for tax-advantaged geographic areas known as “Qualified Opportunity Zones” (Opportunity Zones or QOZs). These QOZs provide substantial tax benefits to those who invest in operating businesses or real estate development or rehabilitation within these areas. Investors in Opportunity Zones can receive deferral of currently owed capital gains taxes, an abatement on those capital gains taxes, and completely tax-free growth on the initial investment for investments held for more than 10 years. Investments in an Opportunity Zone can be an investment in real estate itself, or in a partnership or corporation holding such real estate for use in a trade or business. Opportunity Zone investments can also be utilized for growing operating businesses. Opportunity Zone designations were for the most part only permitted in areas experiencing substantially higher than average unemployment or poverty, or substantially lower median incomes, relative to the median for the area. This requirement alone severely reduced the areas eligible for status as an Opportunity Zone and governors were restricted to only designating approximately 25 percent of those eligible areas as Opportunity Zones. Qualified Opportunity Zone designation is intended to motivate economic activity, increase community impact, and revitalize targeted areas throughout the country. Many successful examples exist around the nation and Tampa Bay. A significant portion of Downtown Tampa is designated as a QOZ and investment in businesses or real estate projects may be qualified for substantial tax incentives amounting to upwards of fifty percent or more increase in IRR on a post-10 year investment horizon.
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