Opportunity Zone

The Federal Qualified Opportunity Zone distinction was created by The Tax Cuts and Jobs Act to spur economic growth in low-income communities by allowing investors to defer federal taxes by taking capital gains from other investments and investing in these designated areas. The U.S. Department of the Treasury and the Internal Revenue Service (IRS) have now designated more than 8,700 Federal Opportunity Zones in 50 States, the District of Columbia, and five U.S. territories, including 260 census tracts in the State of Georgia. Census tract 1104 has been designated within the City of Monroe. 

A Federal 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 Federal Opportunity Zone and that utilizes the investor’s gains from a prior investment for funding the Federal Opportunity Fund.

The following incentives are offered to investors for putting their capital to work in these qualified opportunity zones:

1.      Temporary, capital gain tax deferral:

·         The period of capital gain tax deferral ends upon 12/31/2026 or an earlier sale

2.      A step-up in basis:

·         Investment held for 5 years – Basis increased by 10% of deferred gain (90% taxed)

·         Investment held for 7 years – basis increased by another 5% of deferred gain (85% taxed)

3.      Forgiveness of additional gains

·         Investment held for 10 years – Basis equal to fair market value; forgiveness of gains on appreciation of investment of sale or exchange of Opportunity Fund investment.  This exclusion only applies to gains accrued after an investment in an Opportunity Fund.

If you have any questions, please call the Economic Development office at 770-266-5331. More resources can be found at the Department of Community Affairs site.