Three Major Changes to Opportunity Zone Regulations

The Department of Treasury announced new regulations and clarifications on the Opportunity Zone program.

“I think Treasury and IRS took a practical approach that will facilitate investments in these designated areas,” said Lisa Starczewski, co-chair of Buchanan, Ingersoll & Rooney’s Tax Section and Opportunity Zones team.

This initiative is a part of the Tax Cut and Jobs Act of 2017 to assist development in low-income neighborhoods.

Opportunity Zones are considered a “low-income community” by the U.S. census. This program can be beneficial for investors, business owners, and developers who support Opportunity Zone funds.

More than 8,700 neighborhoods throughout the country, including Philadelphia, Chester, Delaware, Montgomery, and Camden County classify as Opportunity Zones. This revision of the Opportunity Zones regulations clarifies missing key information. Three key points from the updated proposed guidelines for the Opportunity Zone program are:

  • To be qualified as an opportunity fund, fill out Form 8996 and attach the document to your federal income tax return.
  • The incentives for investors will not expire until 2047.
  • The double-down provision has been removed. Investors will only have to make improvements based on the value of the building.

Numerous revitalization projects in Greater Philadelphia exemplify the region’s growing work-live-play environment.  In 2016, the Navy Yard was named one of the most successful redevelopment projects in the nation’s history.

Photo credit: Visit Philadelphia