The Opportunity Zones program was established through the Tax Cuts and Jobs Act of 2017 to encourage investment in historically disadvantaged communities. The Zones are census tract based and offer federal tax incentives for investing realized capital gains in Qualified Opportunity Funds (QOF).
Any type of capital gains can be invested in qualified opportunity funds to receive Opportunity Zone benefits. There are three tax benefits to investment in QOF:
1. A deferral of the tax on the original gain until the earlier (a) the date of the taxpayer sells or exchanges its investment in the QOF; or (b) December 31, 2026.
2. A reduction of the tax on the original gain: (a) 10 percent discount if the QOF investment is held for five years by Dec. 31, 2026 or the date of disposition, if earlier; (b) an additional 5 percent discount (15 percent total) if held for seven years by December 31, 2026.
3. No taxable gains on the QOF investment if held for 10 or more years.
The Bessemer at Seward
A 128-unit multifamily development in Minneapolis, MN, near downtown Minneapolis, the University of Minnesota Twin Cities West Bank Campus, and adjacent to the Blue Line light rail as well as the Hiawatha Bike Trail.