Economic Development Incentives for Opportunity Zone Investing

What do economic development incentives for Opportunity Zone investing encompass? 

Opportunity Zones (OZs) were established under the Tax Cuts and Jobs Act of 2017 to encourage investment in economically distressed communities. Investors enjoy deferred capital gains taxes, step-up in basis, and potential exclusion of gains when investing in Qualified Opportunity Funds (QOFs) that target OZ projects.  

At the state level, investors should refer to Florida Statutes Chapter 288, which outlines the state’s economic development incentives, including tax credits, grants, and loans. Additionally, the Florida Opportunity Fund offers financing options to support OZ projects.  

For example, a Florida-based investor could defer capital gains taxes on a real estate sale by reinvesting the gains in a QOF within 180 days. In addition, this investment would qualify for federal tax benefits and potentially additional state incentives, such as job creation tax credits and workforce training grants. 

Need an Opportunity Zone advocate? Schedule your consultation today with a top Opportunity Zone investing attorney.  

What are the strategic benefits of economic development incentives for Opportunity Zone investing?  

Investors may benefit from the following:  

• Tax advantages: Investors can defer capital gains taxes, obtain step-up in basis, and potentially exclude gains from taxation when investing in QOFs. 
• State incentives: In Florida, investors can access additional economic development incentives, such as tax credits, grants, and low-interest loans. 
• Portfolio diversification: Investing in OZs allows investors to diversify their portfolios by participating in various asset classes, such as real estate and small businesses, in economically distressed areas. 
• Community impact: Opportunity Zone investments contribute to revitalizing underprivileged communities by stimulating job creation and economic growth and improving the quality of life for residents. 
• Long-term growth potential: Investors can capitalize on the long-term growth potential of OZ projects, as they are encouraged to hold their investments for at least ten years to maximize tax benefits. 
• Public-Private partnerships: OZ investments often involve collaboration between public and private entities, enabling investors to access resources and support from government agencies.  

Please contact our office to set up your initial consultation to determine whether Opportunity Zone investment services may be available for your unique situation. 

What steps should counsel take to facilitate economic development incentives for Opportunity Zone investing?  

Counsel should consider the following to protect their clients:  

• Research: Thoroughly research federal and state laws, regulations, and secondary sources related to Opportunity Zone investing.  
• Identify Incentives: Assess the specific federal and state incentives available for the particular Opportunity Zone investment, such as tax deferrals, step-up in basis, and tax credits, and determine eligibility requirements. 
• Develop Investment Strategies: Collaborate with investors to develop tailored strategies for Opportunity Zone investments, taking into consideration risk tolerance, investment goals, and holding periods. 
• Ensure Compliance: Help investors ensure compliance with applicable regulations, including structuring Qualified Opportunity Funds, meeting the substantial improvement test, and adhering to reporting requirements. 
• Monitor Legislative Changes: Stay up-to-date with any changes to federal and state laws and regulations governing Opportunity Zones to help investors adjust their investment strategies accordingly. 
• Leverage Resources: Utilize available resources to access financing options and support for Opportunity Zone projects. 

When a set of facts is appropriate for legal intervention, there are many paths a claimant may take. We are value-based attorneys at Jimerson Birr, which means we look at each action with our clients from the point of view of costs and benefits while reducing liability. Then, based on our client’s objectives, we chart a path to seek appropriate remedies. 

To determine whether your unique situation may necessitate litigation or another form of specialized advocacy, please contact our office to set up your initial consultation. 

Frequently Asked Questions 

1. What types of projects can benefit from Opportunity Zone investments? 

Opportunity Zone investments typically benefit many projects, including commercial and residential real estate development, infrastructure improvements, and start-up businesses. These investments must be made through QOFs as specified in the Tax Cuts and Jobs Act of 2017. 

  2. How can investors identify Opportunity Zones in Florida? 

Investors can identify Opportunity Zones in Florida using the U.S. Department of Treasury’s interactive map, which highlights zones throughout the state.  

  3. What are the reporting requirements for investing in Florida Opportunity Zones? 

Investors must meet specific reporting requirements to maintain compliance with federal and state regulations. For federal tax purposes, investors should file Form 8996 to report investments made in Qualified Opportunity Funds. For state-level compliance, investors should consult their legal counsel and review Florida Statutes Chapter 288 to ensure adherence to Florida’s economic development incentive programs. 

Have more questions about how Opportunity Zone investing could impact you?  

Crucially, this overview of economic development incentives for Opportunity Zone investing does not begin to cover all the laws implicated by this issue or the factors that may compel the application of such laws. Every case is unique, and the laws can produce different outcomes depending on the individual circumstances. 

Jimerson Birr attorneys guide our clients to help make informed decisions while ensuring their rights are respected and protected. Our lawyers are highly trained and experienced in the nuances of the law, so they can accurately interpret statutes and case law and holistically prepare individuals or companies for their legal endeavors. Through this intense personal investment and advocacy, our lawyers will help resolve the issue’s complicated legal problems efficiently and effectively. 

Having a Jimerson Birr attorney on your side means securing a team of seasoned, multi-dimensional, cross-functional legal professionals. Whether it is a transaction, an operational issue, a regulatory challenge, or a contested legal predicament that may require court intervention, we remain tireless advocates at every step. Being a value-added law firm means putting the client at the forefront of everything we do. We use our experience to help our clients navigate even the most complex problems and come out the other side triumphant. 

If you want to understand your case, the merits of your claim or defense, potential monetary awards, or the amount of exposure you face, you should speak with a qualified Jimerson Birr lawyer. Our experienced team of attorneys is here to help. Call Jimerson Birr at (904) 389-0050 or use the contact form to schedule a consultation.