A new tool for steering investment into overlooked urban and rural areas begins to take shape A little-noticed provision of last year?s tax reform push is starting to take shape, and according to an Urban Institute researcher, has the potential to become the nation?s largest economic development program.
Opportunity Zones weren?t initially part of President Trump?s tax reform agenda, and were slipped into the Tax Cuts and Job Act by members of congress, according to Brett Theodos, a researcher at the Urban Institute.
But supporters believe that ultimately, this vehicle for investment can become a vital tool for communities that haven?t benefited from the recent recovery.
The program, which was championed by Sens. Cory Booker (D-NJ) and Tim Scott (R-SC), provides tax benefits and breaks to specifically defined census tracks, based on designations by governors. Investors can claim breaks on capital gains taxes, depending on how long they invest in an area designated as an Opportunity Zone, and receive a deferment on taxes owed. In particular, the exclusion of capital gains can be a ?extremely meaningful investment? in both city and rural areas in need of an economic boost, according to Theodos.
Outside of restrictions on funding ?sin? businesses, benefits can be applied to a broad array of investments, including commercial real estate, housing, infrastructure, and even existing and start-up businesses.
The program works by giving wealthy investors an incentive to t...