Frequently Asked Questions

An Opportunity Zone is an economically-distressed community where new investments, under certain conditions, may be eligible for preferential tax treatment. Localities qualify as Opportunity Zones if they have been nominated for that designation by the state and that nomination has been certified by the Secretary of the U.S. Treasury via his delegation of authority to the Internal Revenue Service.

Opportunity Zones were added to the tax code by the Tax Cuts and Jobs Act on December 22, 2017.

No, they are new. The first set of Opportunity Zones, covering parts of 18 states, were designated on April 9, 2018. Opportunity Zones have now been designated covering parts of all 50 states, the District of Columbia and five U.S. territories.

Opportunity Zones are an economic development tool—that is, they are designed to spur economic development and job creation in distressed communities.

Opportunity Zones are designed to spur economic development by providing tax benefits to investors. First, investors can defer tax on any prior gains invested in a Qualified Opportunity Fund (QOF) until the earlier of the date on which the investment in a QOF is sold or exchanged, or December 31, 2026.  If the QOF investment is held for longer than 5 years, there is a 10% exclusion of the deferred gain.  If held for more than 7 years, the 10% becomes 15%.  Second, if the investor holds the investment in the Opportunity Fund for at least ten years, the investor is eligible for an increase in basis of the QOF investment equal to its fair market value on the date that the QOF investment is sold or exchanged.

A Qualified Opportunity Fund is an investment vehicle that is set up as either a partnership or corporation for investing in eligible property that is located in a Qualified Opportunity Zone.

No. You can 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 a recognized gain in a Qualified Opportunity Fund and elect to defer the tax on that gain.

Yes. The list of designated Qualified Opportunity Zones can be found at Opportunity Zones Resources and in the Federal Register at IRB Notice 2018-48.  Further a visual map of the census tracts designated as Qualified Opportunity Zones may also be found at Opportunity Zones Resources.

The numbers are the population census tracts designated as Qualified Opportunity Zones.

You can find 11-digit census tract numbers, also known as GEOIDs, using the U.S. Census Bureau’s Geocoder.  After entering the street address, select “ACS2015_Current” in the Vintage drop-down menu and click “Find.”  In the Census Tracts section, you’ll find the number after the GEOID.

Yes. The list of designated Qualified Opportunity Zones in which a Fund may invest to meet its investment requirements can be found at Notice 2018-48.

To become a Qualified Opportunity Fund, an eligible corporation or partnership self-certifies by filing Form 8996, Qualified Opportunity Fund, with its federal income tax return. Early-release drafts of the form and instructions are posted, with final versions expected in December 2018. The return with Form 8996 must be filed timely, taking extensions into account.

Yes.  A LLC that chooses to be treated either as a partnership or corporation for federal tax purposes can organize as a Qualified Opportunity Fund.

Yes, you may elect to defer the tax on the amount of the gain invested in a Qualified Opportunity Fund. Therefore, if you only invest part of your gain in a Qualified Opportunity Fund(s), you can elect to defer tax on only the part of the gain which was invested.

You may make an election to defer the gain, in whole or in part, when filing your 2018 Federal Income Tax return. That is, you may make the election on the return on which the tax on that gain would be due if you do not defer it.

Yes, but you will need to file an amended 2018 return, using Form 1040X and attaching Form 8949.

Over the next few months, the Treasury Department and the Internal Revenue Service will be providing further details, including additional legal guidance, on this new tax benefit. More information will be available at treasury.gov and irs.gov.

Over the next few months, the Treasury Department and the Internal Revenue Service will be providing further details, including additional legal guidance, on this new tax benefit. More information will be available at treasury.gov and irs.gov.

Intel

– Austin American Statesman, March 28, 2019

Adding to its already significant Austin presence, retail giant Amazon.com will add 800 tech-focused jobs at its hub in North Austin, company representatives told the American-Statesman.  Read more . . . 

– ABC’s KVUE – Austin, July 17, 2018

A small town east of Austin is in the national spotlight and being recognized as one of the fastest growing suburbs in America.  Read more . . .

– Austin Monitor, October 13, 2015

Manor, Texas, is growing fast. Really fast.  But it hasn’t always been that way. The city, located 12 miles northeast of Austin, was settled by its namesake, James P. Manor, in the 1830s.  When a donation of land by Manor allowed the railroad to come through town in the 1870s, people followed.   Read more . . .