OPPORTUNITY ZONES
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%.
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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)
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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/
Opportunity Zones FAQ
Q. What is an Opportunity Zone?
A. 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. (Source: IRS Opportunity Zones FAQ)
Q. How do I find a list of Opportunity Zones?
A. For a map of Opportunity Zones in Colorado, click here.
Q. What is a Qualified Opportunity Fund?
A. 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. (Source: IRS Opportunity Zones FAQ)
Q. Is there an Opportunity Fund in Colorado?
A. 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. (Source: IRS Opportunity Zones FAQ)
