All low-to-moderate-income (LMI) census tracts were eligible for designation as an opportunity zone. Tracts are LMI if they have a median family income which is no more than 80% of the surrounding area’s median income.
Under the TCJA, opportunity zones are designated, generally low-income, areas where individuals will receive tax incentives to invest. These incentives include:
- A temporary tax deferral for capital reinvested in an opportunity fund.
- A step-up basis for capital gains reinvested in an opportunity fund.
- A permanent exclusion from taxable income of capital gains from the sale or exchange of investment in an opportunity fund, if the investment is held for a minimum of 10 years
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