Federal Opportunity Zones in Cobb County
The Investing in Opportunities Acts proposes a new solution to encourage economic growth and job creation, with incentives to private capital to reinvest those dollars in communities like Cobb County through Opportunity Zones. Created by the federal government as part of the Tax Cut and Jobs Act of 2017, there are several areas in Cobb County recognized as federal opportunity zones. Individuals investing in projects or properties within these area may be able to pay reduced capital gains taxes on returns. Opportunity Zones offers investors three tax incentives for putting their capital to work:
- A temporary deferral: An investor can defer capital gains taxes until 2026 by putting and keeping unrealized gains in an Opportunity Fund.
- A reduction: The original amount of capital gains on which an investor has to pay deferred taxes is reduced by 10% if the Opportunity Fund investment is held for 5 years and another 5% if held for 7 years, for a total of 15%.
- An exemption: Any capital gains on investments made through an Opportunity Fund accrue tax-free as long as the investor holds them for at least 10 years. For investments maintained longer than 10 years and upon a sale or disposition of the investment, the investor is allowed to elect the basis in the investment to quality to the fair market value of the investment.
To qualify for these incentives, investments must be made through a qualified Opportunity Fund – a corporation or partnership organized to invest in designated Opportunity Zones and holds at least 90% of its assets. Note: The U.S. Treasury will provide rules and guidelines on how to become certified as a qualified Opportunity Fund. Check their website for more details.
Resources:
Final federal guidelines are still pending for this program, but below are resources that supply additional information:
For more information contact the Cobb County Economic Development Division by calling 770-528-2018