Dania Beach Community Redevelopment Agency Opportunity Zone
An Opportunity Zone Fund is an investment vehicle organized as a corporation or a partnership that was created as part of the Tax Cuts and Jobs Act of 2017 to incentivize investments in targeted communities called Opportunity Zones. State and Federal governments have identified portions of the Dania Beach Community Redevelopment Agency (CRA) as an Opportunity Zone targeted for economic development. (See map.)
At least 90 percent of the Opportunity Zone investment must hold qualified opportunity zone properties. The Opportunity Zone in the Dania Beach CRA has been identified as a targeted redevelopment area that is experiencing a booming amount of construction and is prime for attractive real estate investments and development opportunities.
Opportunity Zones consist of four elements:
- Places: Eligible census tracts designated as Opportunity Zones where investments will be directed.
- Funds: Qualified Opportunity Funds that will invest money in projects in Opportunity Zones.
- Projects: Business, commercial, residential, or multi-purpose projects located in Opportunity Zones.
- Investors: Individuals or institutions who make equity investments in Opportunity Funds.
What is the Opportunity Zone Fund?
Investing in the Opportunity Zone Fund will allow investors to defer federal taxes on any recent capital gains until December 31, 2026, reducing tax payments by up to 15 percent, and pay as little as zero tax on potential profits from the Opportunity Zone Fund if the investment is held for 10 years. To receive the most favorable tax benefits on their investment, investors are incentivized to hold stakes in the Opportunity Zone Fund over the long term, with the program providing the most potential upside to those who remain in the Opportunity Zone Fund for 10 years or longer.
How Does Investing in the Opportunity Zone Fund Work?
An investor who activates a capital gain by selling an asset (eg. stocks or real estate) can receive special tax benefits if that gain is rolled into the Opportunity Zone Fund within 180 days of the initial transaction. Investors who live in states with higher taxation will receive the greatest benefit from the program. There are three primary advantages to rolling over a capital gain into the Opportunity Zone fund:
- Defer the payment of your capital gains until Dec 31, 2026;
- Reduce the taxes you owe by up to 15% after 7 years; and
- Pay zero tax on gains earned from the Opportunity Zone Fund.
NOTE: Opportunity Zone investments are complex structures. Anyone considering making an Opportunity Zone investment should consult with an attorney or Certified Public Accountant (CPA) specifically trained in structuring these types of investments.
