Opportunity Zones are a new community development program established by Congress in the Tax Cuts and Jobs Act of 2017 to encourage long-term investments in low-income urban and rural communities nationwide. The Opportunity Zones program provides a tax incentive for investors to re-invest their unrealized capital gains into Opportunity Funds that are dedicated to investing into Opportunity Zones designated by the chief executives of every U.S. state and territory.
Similar to a 1031 exchange, the Act provides additional incentives of reduced and deferred taxes, and a requirement that only capital gains be reinvested in Zone Funds. Additionally, if deferred gains are held in a Zone Fund for five years, the capital gains tax on an initial investment is reduced by 10%. After seven years, the discount increases to 15%. If the deferred gain is held in a Zone Fund for at least 10 years, any additional gain on the initial investment is tax-free.
Madison County has received Opportunity Zone designation for two census tracts. Please contact our office at 402-844-2260 to learn more.