The 2017 Tax Cuts and Jobs Act (TCJA) established Opportunity Zones to invite private investment in designated economically-challenged communities throughout the United States. Private investment in Opportunity Zones is encouraged through tax incentives. Colorado has 126 designated Opportunity Zones. Two of the designated Opportunity Zones are located in Morgan County.
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 until 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 10 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. (Source: IRS Opportunity Zones FAQ)
For more information and resources on Opportunity Zones in Colorado visit the Colorado Office of Economic Development & International Trade's website: https://choosecolorado.com/programs-initiatives/opportunity-zones/