By David Curtis
As the American election cycle comes into full swing, the Opportunity Zone program has become a focal point of discussions for both sides of the aisle. The national program, passed as part of the Tax Cuts and Jobs Act of 2017, provides a structure for using deferred capital gains to facilitate investment in economically disadvantaged areas of each state. The investment can be in either operating businesses or tangible assets, with real estate being one of the largest beneficiaries of the program, including investments in low-income housing and historic building rehabilitation.
President Trump has lauded the program since its inception, claiming in the most recent State of the Union address, “Wealthy people and companies are pouring money into poor neighborhoods or areas that haven’t seen investment in many decades.”
Opponents of the Opportunity Zone program claim that it has enhanced luxury real estate projects for developers already generating large windfalls, and the Treasury Department’s internal watchdog group is investigating the selection of some census tracts for being improperly allocated the tax benefit. However, Presidential election opponent Joe Biden has not specifically mentioned the program, instead pushing a repeal of “most all” of the Tax Cuts and Jobs Act. How he will address the Opportunity Zones themselves, however, remains a topic that will emerge as the election campaign continues.
The Opportunity Zone program will continue to be a point of contention between both sides as tax benefits become a key debated issue before November. As the program and other tax incentives’ outlooks change as the election cycle comes to a head, Clocktower Tax Credits continues to be focused on providing up-to-date analysis for our clients, along with outlook on future tax programs and their impact on tax credit markets. For any questions on the Opportunity Zone program and its intersection with the tax credit marketplace, please contact Jeff Jacobson at (978) 823-0200 or JJacobson@ClocktowerTC.com.