What are Opportunity Zones?
Opportunity Zones are a new community development program established by Congress as a part of the Tax Cuts and Jobs Act of 2017, they are designed to encourage long-term private investments in low-income communities. This program provides a federal tax incentive for taxpayers who reinvest unrealized capital gains into "Opportunity Funds," which are specialized vehicles dedicated to investing in low-income areas called "Opportunity Zones."
The zones themselves are to be comprised of low-income community census tracts and designated by governors in every state. South Carolina designated 25 percent of qualifying census tracts as an Opportunity Zone. Qualifying Zones are based on the 2011-2015 American Community Survey.
Please note: The regulations governing the program have yet to be issued by the U.S. Treasury Department and Internal Revenue Service (IRS). More information will become available in the coming months at Treasury.gov and IRS.gov.
What Opportunity Zones are Located in the City of Greenville?
- 45045000500 Census Tract 5, Greenville County, South Carolina Greenville
- 45045000700 Census Tract 7, Greenville County, South Carolina Greenville
- 45045000800 Census Tract 8, Greenville County, South Carolina Greenville
- 45045004300 Census Tract 43, Greenville County, South Carolina Greenville
What are the incentives that encourage long-term investment in low-income communities?
The Opportunity Zones program offers investors the following incentives for putting their capital to work in low-income communities:
- Investors can roll existing capital gains into Opportunity Funds with no up-front tax bill.
- A 5 year holding increases the rolled-over capital gains basis by 10%
- A 7 year holding increases the rolled-over capital gain investment basis 5% for a total of 15%
- Investors can defer their original tax bill until December 31, 2026 at the latest, or until they sell their Opportunity Fund investments, if earlier.
- Opportunity fund investments held in the fund for at least 10 years are not taxed for capital gains.