What is a Qualified Opportunity Zone?
A Qualified Opportunity Zone (QOZ) is a designated economically distressed community where investors can receive tax benefits for investing in development projects. These zones were established as part of the Tax Cuts and Jobs Act of 2017 to spur economic growth and job creation in underserved areas. Investors who reinvest capital gains into Qualified Opportunity Funds (QOFs) that invest in these zones can defer and potentially reduce their capital gains taxes. Additionally, investors can realize tax-free growth on their investments if held for a certain period and can even permanently exclude some capital gains if the investment is held for a specified duration.