Opportunity Zone Program
The Opportunity Zones tax incentive was established by Congress in the 2017 Tax Cut and Jobs Act as an innovative approach to spur long-term private sector investments in low-income urban and rural communities nationwide. This economic development initiative is based on the bipartisan Investing in Opportunities Act.
Opportunity Zones may help address a number of challenges in Bexar County, including:
- Promoting economic vitality in distressed areas of Bexar County.
- Funding the development of workforce and affordable housing in areas with escalating prices and inventory shortages.
- Funding new infrastructure to support population and economic growth.
- Upgrading the capability of existing underutilized assets through capital improvement investments.
The Treasury Department designated 24 census tracts in Bexar County as “opportunity zones”.
Bexar County Designations
|Bexar County Opportunity Zones|
|Port San Antonio/ Lackland AFB||1609.01|
|Brooks City Base||1508|
Only equity investments are eligible for the Opportunity Zone tax incentive.
- Business investments: can include investments in a new stock issuance for corporations and ownership interests in partnerships and LLCs.
- Investments in real estate: must include an ownership interest of new construction assets that will be "substantially improved" within 30 months of acquisition by the Opportunity Fund.
- New equipment and other assets: are also eligible investments.
Tax incentives for investing in a qualified Opportunity Fund:
Investors can defer tax on any prior gains until December 31, 2026 or the date on which an investment is sold or exchanged, whichever is earlier, so long as the gain is reinvested in a Qualified Opportunity Fund. Second, if the investor holds the investment in the Opportunity Fund for at least ten years, the investor would be eligible for an increase in basis equal to the fair market value of the investment on the date that the investment is sold or exchanged.
- Temporary deferral of inclusion in taxable income for capital gains reinvested into an Opportunity Fund.
- A step-up in basis for capital gains reinvested in an Opportunity Fund.
- A permanent exclusion from taxable income of capital gains from the sale or exchange of an investment in an Opportunity Fund if the investment is held for at least 10 years.