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Opportunity Zones in 2021: A Lucrative Investment

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Wednesday January 20, 2021
Opportunity Zones in 2021: A Lucrative Investment

According to data from Novogradac, Opportunity Funds received more than $12 billion in investments during 2020. In 2017 the Tax Cuts and Jobs Act (“TCJA”) created a tax deferral program, which was designed to encourage developers to invest their capital gains in Opportunity Zone projects; for those investments, capital gains taxes are delayed until 2026. Opportunity Zones are a community development program created in the TCJA to incentivize investments in low-income communities across the US.

Moreover, if an investor maintains their investment in the Opportunity Zone for more than 10 years, their capital gains taxes disappear completely.

TCJA was so effective at encouraging investors to direct their resources to Opportunity Zones, that investment groups had to turn away investments. However, many people argue that the TCJA simply created a tax haven for the wealthy, while failing to accomplish anything. Specifically, critics have noted that many Opportunity Zones are not lower income areas, and others have noted that there are no metrics showing that Opportunity Zones have benefited the neighborhoods they are in.

Today, President Joe Biden will take office, and begin reforming the program in a manner consistent with his promises on the campaign trail. These promises include incentivizing developers to listen to members of the community and creating a functional system for measuring the impact Opportunity Zones have on their local communities.

At the Chernov Team we understand that knowledge is power, and knowledge of government programs is powerful knowledge indeed. At the Chernov Team we know that whoever comes to the table most prepared leaves with the most, and the Chernov Team always leaves the table with the most.

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