11:30 AM-12:00 PM Lunch & Networking
12:00-1:30 PM Presentation by KPMG
The Tax Reform and Jobs Act provides for a special tax regime for investments in “Opportunity Zones”. Members of KPMG national Opportunity Zone team, Joe Scalio and Jeffrey Fletcher will cover the following:
- Why invest in an Opportunity Zone-what are the benefits
- Who should consider investing in an Opportunity Zone
- The types of projects that are believed to be well suited for Opportunity Zone investment
- Opportunity Zone Funds- what type of fund structures make sense and how to access existing Opportunity Zone funds
- How real estate developers, bankers and cities can take advantage of Opportunity Zone benefits
Below is the background of Opportunity Zone:
Opportunity Zones are a new tool communities can use to drive economic development. Established by the U.S. Congress in the Tax Cuts and Jobs Act of 2017, Opportunity Zones encourage long-term investments in low-income urban and rural communities across the United States. It is the most significant community development program to pass in a generation since the Community Reinvestment Act.
Governors across all 50 states and territories designate low-income census tracts as “Opportunity Zones”. Investors then have the chance to take profits from current holdings and reinvest them in “Opportunity Funds,” which finance commercial and industrial real estate, housing, infrastructure, and current or start-up businesses located in the Opportunity Zones. After several years in the Fund, some of the tax on investors’ initial profits (capital gains) will be forgiven. And, the longer investors leave their money in the Fund, the more capital gains tax will be waived. If held for a decade, the added profit made from the Opportunity Fund investment will not be taxed at all.
Opportunity Zones have the potential to become the largest community development program in our nation’s history. Still, there’s much uncertainty about how much investment will flow into Opportunity Zones, what those investments will look like, and how they will impact people’s lives.
Recent estimates indicate that there is approximately $6 trillion of unrealized capital gain across the U.S. available to be invested in the Qualified Opportunity Zone Program.
This program will be tremendously beneficial to both designated communities and investors alike. Communities will benefit from an influx of private capital that will spur innovative projects, and investors’ portfolios will find great relief in the program’s tax minimization component. It’s a win-win.