Treasury Releases Proposed Regulations on Opportunity Zones

Spur Private Construction Market & Mitigate Taxes on Capital Gains
On Friday, the Treasury Department and the Internal Revenue Service (IRS) released proposed regulations on Opportunity Zones, a new program created by the Tax Cuts and Jobs Act to spur investment—including construction development—in underserved areas of the country. Anyone who makes a qualified investment in an Opportunity Zone can defer capital-gains from an unrelated investment by up to 15 percent, whether it’s from the sale of other real property or cashing out gains on stocks. Moreover, any gains realized on a zone investment are tax-exempt if they are held for at least 10 years.
Earlier this year, in consultation with Governors, Treasury designated roughly 9,000 underserved and low-income census tracts as Opportunity Zones.  About 35 million people reside in an Opportunity Zone.
The regulations provide additional clarity about the how the program will operate and appear to be very favorable to real property investment and development. AGC will study the regulations and evaluate any chance for improvements that would further benefit construction.
For further information, please contact Matt Turkstra at matt.turkstra@agc.org or (202) 547-4733.


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