What are the Opportunity Zones, and how can they benefit a business?

Opportunity Zones are tax incentives to encourage those with capital gains to invest in low-income and undercapitalized communities. The purpose of O-Zones is to provide incentives to spur economic development and job creation in the over 8764 designated communities that are in all 50 states, the District of Columbia, and five U.S. territories.

The program provides tax benefits for investing unrealized capital gains in Opportunity Zones. These zones offer tax benefits to a business or individual investors who can elect to temporarily defer tax on capital gains if they invest those gain amounts in a Qualified Opportunity Fund (QOF).

Three primary tax advantages exist from investing in Opportunity Zones.

Qualified Opportunity Funds can finance a broad variety of activities and projects. Funds can finance housing, industrial and commercial real estate, infrastructure, and existing or start-up businesses. For real estate projects to qualify for Opportunity Fund financing, the investment must result in the properties being “substantially improved.”

Qualified opportunity zone businesses must meet these requirements. Each taxable year, a QOZ business must earn at least 50% of its gross income from business activities within a QOZ. The regulations provide three safe harbors that a business may use to meet this test.

  1. At least half of the aggregate hours of services received by the business were performed in a QOZ.
  2. At least half of the aggregate amounts that the business paid for services were for services performed in a QOZ.
  3. Necessary tangible property and necessary business functions to earn the income were located in a QOZ.

Contact CCC to learn more about the Opportunity Zones and how your business may be able to profit from the tax benefits that they offer.


Contact CCC to see how we can save your organization time and money.
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(800) 207-6926

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