What Are Opportonity Zones?
Enacted as part of the Tax Cuts and Jobs Act of 2017, an opportunity zone is a designated economically distressed area, nominated by its respective state. These zones exist in parts of all 50 states, the District of Columbia, and five U.S. territories.
The Opportunity Zones Program uses substantial tax incentives to:
- Drive idle, unproductive capital into low-income communities.
- Significantly benefit investors, asset owners, and communities.
Are There Risks Associated With Opportunity Zone Investments?
The risk that a bad investment is cloaked inside an Opportunity Zone investment is something investors must be wary of, as tax savings can be a very compelling reason to invest. In the end, the investments within an Opportunity Zone must stand on their own.
Careful planning and guidance by trusted advisors at the onset of any investment is key to reducing the risks associated with this and other investments.