A recent article on Bloomberg.com discusses the recent “fervor” about opportunity zones and how it is heating up across the country. As we have posted, an Opportunity Zone is an economically-distressed community where new investments, under certain conditions, may be eligible for preferential tax treatment, that were created by Tax Cuts and Jobs Act on December 22, 2017. They are an economic development tool designed to spur economic development and job creation in distressed communities. Bloomberg points that there are some questions about whether these investments will reach the areas that need it most:
“…For a limited time, investors who develop real estate or fund businesses in these areas are able to defer capital gains on profits earned elsewhere and completely eliminate them on new investments in 8,700 low-income census tracts. The goal is to reinvigorate these areas. But the question is whether the 2017 tax law will, as U.S. Treasury Secretary Steven Mnuchin predicts, pump $100 billion into places that need it most, or if investors will play it safe by funding projects in a few zones already on the upswing.