This revised version of Pathstone’s “Opportunity Zones: A New Way to Tackle Economic Equality Challenges in America” paper, originally released in July 2018, addresses additional regulations recently announced by the IRS. On October 19, 2018, the IRS issued much anticipated proposed regulations to provide clarity on many significant points in the initial draft of the law. The initial draft caused many investors, potential fund managers and tax professionals to sit on the sidelines until such clarification was provided before proceeding in taking advantage of investing in Qualified Opportunity Zone funds. One of the most important clarifications is that only capital gains, as opposed to ordinary gains, are eligible for the special tax breaks. Read the latest edition of this paper to learn more about the additional clarity on tax implications provided by the recently issued regulations and further commentary on investments in the Opportunity Zones program.
Tucked away in the 1,000+ page Tax Cuts and Jobs Act, is a very interesting section on something called “Opportunity Zones.” Seemingly overlooked due to some of the headlinegrabbing changes to income tax rates and deductions, the creation of Opportunity Zones has begun to generate buzz not only in the tax planning world, but also the Environmental, Social and Governance (ESG) community. Given our interest in both areas, we took a deeper look. This paper explores the tax benefits, positive social ramifications, and potential investment opportunities of the Opportunity Zone program.