The Opportunity Zone program was created as a provision of the Tax Cuts and Jobs Act of December 2017. The program was developed with the intent to help encourage investment in economically distressed communities – called qualified opportunity zones (QOZs) – by allowing taxpayers to invest realized capital gains in qualified opportunity funds (QOFs). Investors in QOFs are granted both immediate and eventual tax benefits.
The program has drawn widespread interest from investors despite little guidance as to how the program would operate. The IRS and Treasury Department released proposed guidelines governing the program on Friday, October 19, 2018 that provide much needed clarity for investors and tax planners alike.
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