Tucked Into the Tax Bill, a Plan to Help Distressed America
- 6 years ago
Tucked Into the Tax Bill, a Plan to Help Distressed America
To bring those investors into distressed communities “you have to hit them in their sweet spot,
and their sweet spot is, they pay a lot of capital gains taxes,” said Donald Hinkle-Brown, president and chief executive of Reinvestment Fund, a community development group.
“But if it’s successful, we’ll look back 10 years from now
and say this was one of the most important parts of the tax bill, and one we didn’t talk nearly enough about.”
Mr. Hassett has a longtime interest in providing tax incentives for economic development in distressed areas.
If the investment is held beyond 10 years, the investor permanently avoids capital gains taxes on any proceeds from the Opportunity Fund investment.
The law creates “Opportunity Zones,” which will use tax incentives to draw long-term investment to parts of America
that continue to struggle with high poverty and sluggish job and business growth.
“I had to explain it several times to folks,” said Mr. Scott, whose co-sponsors on a previous iteration of an opportunity
zone bill included Senator Cory Booker, Democrat of New Jersey, and House lawmakers from both parties.
An investor who retains an investment for seven years will pay only 85 percent of
the capital gains taxes that would have been due on the original investment.
The new law offers investors an alternative: to roll those unrealized gains into an Opportunity Fund,
and defer federal taxes on the profit, at least temporarily.
To bring those investors into distressed communities “you have to hit them in their sweet spot,
and their sweet spot is, they pay a lot of capital gains taxes,” said Donald Hinkle-Brown, president and chief executive of Reinvestment Fund, a community development group.
“But if it’s successful, we’ll look back 10 years from now
and say this was one of the most important parts of the tax bill, and one we didn’t talk nearly enough about.”
Mr. Hassett has a longtime interest in providing tax incentives for economic development in distressed areas.
If the investment is held beyond 10 years, the investor permanently avoids capital gains taxes on any proceeds from the Opportunity Fund investment.
The law creates “Opportunity Zones,” which will use tax incentives to draw long-term investment to parts of America
that continue to struggle with high poverty and sluggish job and business growth.
“I had to explain it several times to folks,” said Mr. Scott, whose co-sponsors on a previous iteration of an opportunity
zone bill included Senator Cory Booker, Democrat of New Jersey, and House lawmakers from both parties.
An investor who retains an investment for seven years will pay only 85 percent of
the capital gains taxes that would have been due on the original investment.
The new law offers investors an alternative: to roll those unrealized gains into an Opportunity Fund,
and defer federal taxes on the profit, at least temporarily.