What is an Opportunity Zone?

Enacted as part of the 2017 Tax Cuts and Jobs Act, Opportunity Zones are low income census tracts, nominated by governors and certified by the U.S. Department of the Treasury. Investors can invest in Opportunity Funds, which provide capital gains tax advantages for financing new projects and enterprises located within opportunity zones.

A Qualified Opportunity Fund (QOF) is an investment vehicle that is an investment vehicle that files either a partnership or corporate federal income tax return and is organized for the purpose of investing in QOZ property.

An investor can defer tax on any prior eligible gain to the extent that a corresponding amount is timely invested in a Qualified Opportunity Fund (QOF). The deferral lasts until the earlier of the date on which the investment in the QOF is sold or exchanged, or December 31, 2026. If the QOF investment is held for at least 5 years, there is a 10% exclusion of the deferred gain. If held for at least 7 years, the 10% exclusion becomes 15%.

Second, if the investor holds the investment in the QOF for at least 10 years, the investor is eligible for an adjustment in the basis of the QOF investment to its fair market value on the date that the QOF investment is sold or exchanged. As a result of this basis adjustment, the appreciation in the QOF investment is never taxed. A similar rule applies to exclude the QOF investor’s share of gain and loss from sales of QOF assets.

The City of Arlington has one census tract in Tarrant County (CT 1229) designated as an Opportunity Zone. Its East-West boundary extends from Collins Street to New York Avenue, and its North-South boundary extends from Park Row Drive and Arkansas Lane.

See brochure for map and demographic information.