The U.S. Treasury Department and the Internal Revenue Service (IRS) have issued proposed regulations and other published guidance for the new “Opportunity Zone” tax incentive.
U.S. businesses that make qualified investments in one of the 8,761 Opportunity Zones identified by the IRS before December 31, 2026, will be eligible for certain tax deferments. The 2017 Tax Cuts and Jobs Act signed into law late last year created these new Opportunity Zones around the county in an effort to spur new investments in economically distressed neighborhoods.
The proposed regulations clarify that nearly all capital gains qualify for deferral. Partnerships may choose whether the partnership itself or its partners get the deferral benefit, and similar rules apply for other pass-through businesses—such as many convenience retailers—as well.
For more information on how your business may be able to benefit from tax deferrals under this program, see the proposed rule submitted to the Federal Register.