About Opportunity Zones
Opportunity Zones, a new economic development tool enacted by the Federal Tax Cuts and Jobs Act of 2017, offers investors preferential tax treatment for capital gains invested in low income communities designated as Opportunity Zones. The program is designed to encourage long term investment in economically distressed areas and promote economic growth. These investments will provide support to projects focused on a wide array of issues including, for example, downtown revitalizations, improvements to workforce housing, and expansions of industrial parks and innovation districts.
In April of 2018, Governor Colyer nominated 74 census tracts across Kansas to be designated by the U.S. Department of Treasury as Kansas Opportunity Zones. These Designated Opportunity Zones are now eligible to receive investments through Qualified Opportunity Funds to spur economic growth in their communities.
For the investor, the Opportunity Zone program offers tax incentives including deferral and reduction of capital gains taxes when the gain is invested in a Qualified Opportunity Fund and maintained for a period of at least five years. Investors can defer tax on any prior gains invested in a Qualified Opportunity Fund (QOF) until the earlier of the date on which the investment is sold or exchanged, or December 31, 2026. If the Qualified Opportunity Fund investment is held for longer than 5 years, there is a 10% exclusion of the deferred gain, after 7 years, the 10% becomes 15%. Additionally, if the investor holds the QOF investment for at least ten years, the investor is eligible for a permanent exclusion from taxable income of capital gains accrued on the QOF investment.
Get more FAQs about Opportunity Zones.
The specific census tracts and their counties to be included in the governor’s nominations for designation as Opportunity Zones are: