What are Opportunity Zones?
In December of 2017, new tax legislation was enacted that included the “Investing in Opportunity Act.” This act created an investment tool called “Opportunity Zones,” with the goal of incentivizing private investment to revitalize economically distressed communities across the U.S. Over 8,700 census tracts throughout the nation were designated as Opportunity Zones, nominated by the governor of each state.
The Opportunity Zone program provides tax benefits for investors to re-invest their capital gains into dedicated Opportunity Funds, which are then used to make investments in qualifying business or real estate projects in designated Opportunity Zones.
Where are the Opportunity Zones in Ogden?
In Ogden City, there are four census tracts that are designated as Opportunity Zones. City-designated Redevelopment Areas (RDAs) that overlap with the designated Opportunity Zones may provide opportunity for additional local incentives. The designated Opportunity Zones and RDAs are shown on the map below.
What are the benefits of Opportunity Zone investment?
Investors qualify for three different tax benefits if they invest their capital gains into qualifying zones.
- Temporary Tax Deferral - A taxpayer can defer tax payments on their capital gains until 2026 if they put those gains into an opportunity fund to be invested in a qualified opportunity zone business or real estate.
- Step-Up in Basis – Step-Up in Basis is a tax liability reduction on capital gains. If the investment is held for at least five years, tax liability is reduced by 10 percent. If the investment is held for an additional two years, for a total of seven years, the tax liability is reduced by 15 percent.
- Tax Exemption - All capital gains made from the opportunity zone investment are free from federal taxes, as long as the investment made through an opportunity fund is held for at least 10 years.
More details regarding these incentives are provided here and/or here. A timeline for capturing these benefits is provided below. To maximize the step-up in basis, capital gains must be invested by the end of 2019.
How do I invest in Ogden's Opportunity Zones?
- Download the investment prospectus for Ogden, which includes a list of Qualified Opportunity Zone funds
- For more information, please contact Ogden City Business Development
How do I seek investment for my business?
- Download the guide for businesses seeking investment, which includes a list of Qualified Opportunity Zone funds
- For more information, please contact Ogden City Business Development.