Opportunity Zones and Opportunity Funds

Opportunity Zones

Created in the 2017 federal tax law, Opportunity Zones are designed to help businesses and entrepreneurs defer or reduce their capital gains taxes by making investments in low-income communities. The tax break rewards investors for spending capital gains on businesses or real estate in economically distressed areas and really pays off when the investment can be held over time.

The opportunity zone tax break is several incentives in one.

  • Investors defer paying income taxes on capital gains that they invest in special funds that, in turn, invest in real estate or businesses in the zones.
  • After five years, investors get a tax break on those gains.
  • After seven years, the tax break increases.
  • Most importantly, after 10 years, investors can sell their opportunity fund investment and pocket new capital gains from the investment tax-free.

In Longview, the Governor designated one census tract as an opportunity zone. Due to the underlining city zoning, options for a wide variety of potential investments exist. In commercial areas, developers could opt for mixed-use residential, office or retail projects. Other zones allow large commercial uses, light and even heavy industrial investments.

Opportunity Funds

Investors can choose self-certify to create their own “fund” or join with other investors in a larger investment vehicle. A fund is merely a registered investment in an eligible activity in an eligible area. There is minimal paperwork required to establish a new fund.

How can we help?

City staff is happy to discuss your potential project and help it come to life as quickly and easily as possible. Contact us at (360) 442-5051 and let’s get to work!

For More Information

https://www.irs.gov/pub/irs-pdf/f8996.pdf

https://www.irs.gov/newsroom/opportunity-zones-frequently-asked-questions

https://ndconline.org/wp-content/uploads/2018/11/WA-OZ_CohnReznick-Presentation.pdf

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