A batch of tax regulations yet to be released from the Treasury Department will establish the most comprehensive guidelines yet for what types of investments qualify for tax benefits associated with the Opportunity Zones program created by the 2017 federal tax law, and how investors must proceed in order to take advantage of them.
Potentially billions of dollars await the decision, The New York Times reports, as investors around the country are eager to put money into the tax-advantaged zones, of which there are several in the Baton Rouge area.
Most of the projects spurred so far by the zone designations are real estate, like condominium developments or hospitality. Whether the zones ultimately spur other types of investment, like small businesses and start-up technology companies, will largely depend on how the rules are structured.
Treasury officials have sent the White House a draft version of what will be the second batch of regulations governing so-called opportunity funds, which invest in Opportunity Zones, and what types of investments can qualify for the special tax treatment.
The tax break works by allowing investors to roll capital gains from other investments into the funds. Taxes on those original gains are deferred and, if the investment is held for several years, can be sharply reduced. Read the full story.