The Treasury Department has released its Opportunity Zone guidance today. The Opportunity Zone tax incentive was born out of the Tax Cuts and Jobs Act and is designed to attract investments in economically distressed communities nationwide. It allows investors to defer capital gains tax for new investments made in qualified Opportunity Zones. The proposed regulations released today clarify what gains qualify for deferral, which taxpayers and investments are eligible, the parameters for Opportunity Funds, and other investment structure, timing and gain related guidance. The guidance also asks for public comment on a series of technical questions, such as the definitions and limitations of “substantial improvement” and “original use” for real and tangible property. The comment period is 60 days. The Treasury Department plans on issuing additional guidance before the end of the year. This clarifying guidance will likely provide a jump-start to an anticipated wave of Opportunity Zone investments across the country. While this program has notably few restrictions, we hope that this program is successful in encouraging sustainable economic revitalization, developing affordable housing, and creating jobs in low-income distressed communities. You can view all of the Qualified Opportunity Zones in NY here.

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