A. An Opportunity Zone is an economically-distressed community where new investments, under certain conditions, may be eligible for preferential tax treatment. Localities qualify as Opportunity Zones if they are a low-income census tract with an individual poverty rate of at least 20 percent and median family income no greater than 80 percent of the area median.
A. Opportunity Zones were added to the tax code by the Tax Cuts and Jobs Act on December 22, 2017.
A. Opportunity Zones are an economic development tool—that is, they are designed to spur economic development and job creation in distressed communities in Maryland and other states and territories.
A. Opportunity Zones are designed to spur economic development by providing tax benefits and incentives to investors.
A. There are 589 eligible census tracts in Maryland with a maximum of 25% or 149 of these tracts allowed to qualify as Opportunity Zones per program rules.
A. There are three types of incentives available:
A. Qualified Opportunity Fund is an investment vehicle that is set up as either a partnership or corporation for investing in eligible property that is located in an Opportunity Zone and that utilizes the investor’s gains from a prior investment for funding the Opportunity Fund.
A. See a map of approved Opportunity Zones in Maryland.
A: The final guidelines for the Opportunity Funds have not been released by the U.S. Treasury. It is anticipated that guidance about the nature of the investments or fund formation will be included in these guidelines.
A. Over the next few months, the Treasury Department and the Internal Revenue Service will be providing further details, including additional legal guidance, on this new incentive. We will continue to provide updated information at http://www.dhcd.maryland.gov/opportunityzones as it becomes available. More information will also be available at Treasury.gov and IRS.gov.
A. An official press release was issued on April 20th, 2018: Maryland Announces Selection of State’s New Opportunity Zones
A. The Maryland Department of Housing and Community Development (DHCD) and the Maryland Department of Commerce hosted an Opportunity Zone Conference in College Park, MD on July 31 to discuss the new tax incentives for investing in your communities. Conference resources are available.
A: The U.S. Treasury has provided additional guidance on how to find and start an opportunity funds. The newly released proposed regulations are intended to provide investors and fund sponsors the information they need to confidently enter into new business arrangements in designated Opportunity Zones.
A. By the end of 2018, the Treasury Department plans on issuing additional guidance on Opportunity Zones. Maryland DHCD will continue to provide updated information at http://www.dhcd.maryland.gov/opportunityzones as it becomes available. More information will also be available at Treasury.gov and IRS.gov.
Department of Treasury Opportunity Zone Resources: CDFIFund - Opportunity Zones
Department of Treasury Press Release: U.S. Treasury Press Release April 2018
Tax and Jobs Act 2017Department of Treasury: Proposed Regulations and Guidance for Opportunity Zones - October 2018