InvestorQ : What is an opportunity zone fund?
Pavithra Prabhakaran made post

What is an opportunity zone fund?

seema Upadhyaya answered.
7 months ago
The Opportunity Zones incentive is a new community investment tool established by the United States Congress in the Tax Cuts and Jobs Act of 2017 to encourage long-term investments in low-income urban and rural communities nationwide. Opportunity Zones provide a tax incentive for investors to re-invest their unrealized capital gains into dedicated Opportunity Funds.

Any gains achieved after the investment is made in an opportunity zone fund are tax-free if the investment is held for at least ten years. To spur more investment, Opportunity Zone Funds were designed to be less restrictive and costly than existing programs such as the New Markets Tax Credit Program and the Low-Income Housing Tax Credit Program. The goal was also to make funds accessible to smaller investors, not just large institutions and enterprises. 

Theoretically, any individual, group, or business entity can create a fund by establishing a qualified entity and filing the appropriate paperwork. Projects could involve improving an existing property, developing a new property, starting a business, or funding any other qualifying local initiative. As of now, several dozen such funds exist. Some of them are-

  • 113 York OZ Fund
  • 1787 Capital Opportunity Zone Fund
  • 1807 Hybrid Fund
  • 3LB Equities Opportunity Zone Fund
  • 4523 Opportunity Fund
  • Affordable Housing Opportunity Fund
  • Seminole Opportunity Zone Fund I LLC
  • Blue Spruce Opportunity Fund