Opportunity Zone Business Incentive at Brunswick Landing
A new program established under the Tax Cuts and Jobs Act of 2017, Opportunity Zone designation provides a federal tax incentive for taxpayers who invest unrealized capital gains into so-called “Opportunity Funds,” dedicated to investing in established “Opportunity Zones.” On May 21st, the Maine Department of Economic and Community Development designated 32 Maine census tracts, including Brunswick Landing and parts of East Brunswick, as Opportunity Zones to help spur development and investment in low income areas.
“This is another tool that will help us attract investment in the redevelopment project and we are grateful for it will do our best to use it to our advantage,” MRRA Executive Director Steve Levesque said.
Read Mainebiz story on State of Maine’s designated OZs.
What are Opportunity Zones?
The Opportunity Zones program offers three tax incentives for investing in low-income communities through a qualified Opportunity Fund.
- Temporary Deferral: A temporary deferral of inclusion in taxable income for capital gains reinvested into an Opportunity Fund. The deferred gain must be recognized on the earlier of the date on which the opportunity zone investment is disposed of or December 31, 2026.
- Step-up in Basis: A step-up in basis for capital gains reinvested in an Opportunity Fund. The basis is increased by 10% if the investment in the Opportunity Fund is held by the taxpayer for at least 5 years and by an additional 5% if held for at least 7 years, thereby excluding up to 15% of the original gain from taxation.
- Permanent Exclusion: 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. This exclusion only applies to gains accrued after an investment in an Opportunity Fund.
Learn more about this program on the Economic Innovation Group website.
