Opportunity zones are certified low-income areas into which investors can deploy capital for value-adding projects, in exchange for federal capital gains tax and other advantages.
In general, capital gains are incurred when selling an appreciated asset such as real estate or stocks. The appreciated gain is taxed at a special rate, which is typically 15% to 20%.
By investing in opportunity zones an investor’s capital gains rate can be reduced by 50% to 75% depending on how long the investment is held.
Opportunity zone funds can be used for solar, microgrids, electric vehicle charging stations, and energy storage.
Another benefit, Investors will not be taxed on any capital gains incurred from a project if they hold that property or asset for a decade or more.
There are 8,760 opportunity zones in all 50 states.