New "Qualified Opportunity Zone" Program

As part of federal tax reform, Congress created a new “Qualified Opportunity Zone” program to encourage investment in businesses that are located in low-income communities. Under this program, a taxpayer who recognizes gain on the sale of property (including, for example, investment assets such as stock or other security interests, and business assets) to an unrelated purchaser can defer and partially eliminate such gain, as well as additional future gain, by investing the sale proceeds in a “Qualified Opportunity Fund.” The program creates a new potential source of capital for businesses and real estate developments while at the same time creating a new tax benefit for investors seeking to reduce their tax burden on taxable asset dispositions.