Qualified investments made in designated Opportunity Zones allow investors to receive tax benefits on currently unrealized capital gains. The Federal Tax Cuts
and Jobs Act of 2017 that passed in December 2018 included provisions for the new revitalization tools, the Opportunity Zone and Opportunity Fund. The rules associated with qualification of Opportunity Investment Funds and Qualified Opportunity Investments can be seen here.
Waynesboro has one census tract included in the Opportunity Zone program. The tract encircles the city on the south and east and includes the City-owned industrial parks, East Main from Delphine to the County Line, and parts of Basic City. See map at right, which also shows the adjoining Augusta County tract. To learn if your property is included, search the interactive map here.
Generally speaking there are three major components to Opportunity Zones.
- Investments: Opportunity Funds make equity investments in businesses and business property in Opportunity Zones.
- Funds: Opportunity Funds are investment vehicles organized as corporations or partnerships for the specific purpose of investing in qualified Opportunity Zones.
- Zones: States and territories nominated 25% of their eligible low-income census tracts as Opportunity Zones. Treasury approved final map.
Benefits to include:
- Deferral of capital gains taxation affords Opportunity Zone investors larger investments upfront
- Basis step-up explicitly
- Reduces deferred taxation of invested capital gains, rewarding long-term commitment to Opportunity Zone communities
- Capital gains tax on investment returns eliminated entirely for 10-year investors