Opportunity Zones (OZ’s) are a new community development program established by Congress in the Tax Cut and Jobs Act of 2017 to encourage long-term investments in low-income and urban communities nationwide.
OZ’s are an economic development tool—that is, they are designed to spur economic development and job creation in our distressed communities. OZ’s offer investors the following incentives:
- A temporary tax deferral for capital gains reinvested in an Opportunity Fund. The deferred gain must be recognized on the earlier of the date on which the opportunity zone investment is sold or December 31, 2026.
- A step-up in basis for capital gains reinvested in an Opportunity Fund. The basis of the original investment is increased by 10% if the investment in the qualified opportunity zone fund is held by the taxpayer for at least 5 years, and by an additional 5% if held for at least 7 years, excluding up to 15% of the original gain from taxation.
- A permanent exclusion from taxable income of capital gains from the sale or exchange of an investment in a qualified opportunity zone fund, if the investment is held for at least 10 years. (Note: this exclusion applies to the gains accrued from an investment in an Opportunity Fund, not the original gains).
Do I have to live or own property in an OZ zone to participate?
No. You can also get the tax benefits even if you don’t live, work or have a business in an Opportunity Zone. All you need to do is invest in a Qualified Opportunity Fund.
What is a Qualified Opportunity Fund?
Opportunity Funds are investment vehicles organized as corporations or partnerships for the specific purpose of investing in Qualified Opportunity Zones.
Where are OZ’s in Salt Lake City?
Altogether, 46 zones were designated in the state of Utah with 7 zones in Salt Lake City:
- 49035113906 – Salt Lake City/Magna (NWQ)
- 49035102701 – Glendale area
- 49035100600 – Fairpark
- 49035102702 – Poplar Grove area
- 49035114000 – Granary and Downtown
- 49035102500 – Depot and Downtown
- 49035114500 – Salt Lake City/West Valley City (directly South of the airport, East of NWQ)
Follow the Treasury Department and the Internal Revenue Service for further details, including additional legal guidance, on this new incentive. Updates on Opportunity Zone implementation can be found here:
- IRS | Opportunity Zones Frequently Asked Questions
- S. Department of the Treasury | Community Development Financial Institutions Fund (CDFI) Opportunity Zones Resources