The federal Tax Cuts and Jobs Act of 2017 introduced a new community redevelopment program intended to encourage investment in certain low-income communities across the country by sparking economic development and job growth within these communities.  In certain circumstances, a taxpayer may invest capital gains from a sale or exchange into a qualified opportunity fund (QOF), which QOF has, in turn, invested in property such as stock, partnership interests or business property (including real property), located within a qualified opportunity zone (QOZ), after December 31, 2017, allowing the taxpayer to potentially exclude from income up to 15% of the capital gains and defer the recognition of the capital gains income to December 31, 2026.  In addition, there is the potential of excluding all gains from the QOF investment if such investment is held for at least ten years.

This is a powerful new tool that, when coupled with other investment incentives such as Low-Income Housing Tax Credits, EB-5 visa investment projects and other state-based programs, could result in significant tax savings to investors.

Please click here for a more detailed analysis of QOZs and possible tax savings for investors.

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Photo of Louis B. Schatz Louis B. Schatz

Louis Schatz is a partner in Shipman’s Tax and Employee Benefits Practice Group, a group which he chaired for many years. From 2007 to 2017, Lou served on the firm’s seven-person Management Committee. He is the past Chair of the Tax Section of…

Louis Schatz is a partner in Shipman’s Tax and Employee Benefits Practice Group, a group which he chaired for many years. From 2007 to 2017, Lou served on the firm’s seven-person Management Committee. He is the past Chair of the Tax Section of the Connecticut Bar Association.

Lou practices in the areas of federal and State of Connecticut tax with attention to the representation of closely held businesses organized as limited liability companies, partnerships and S corporations; real estate joint ventures; and the representation of taxpayers involved in federal and Connecticut tax controversies (at the audit, appellate and court levels). He is a frequent lecturer on federal and State of Connecticut tax, partnership and limited liability company issues.

Photo of Gregory P. Muccilli Gregory P. Muccilli

Greg Muccilli practices in real estate development, commercial financing, commercial leasing and land use counseling, particularly in New Haven County, Connecticut.  His experience includes counseling clients in the acquisition, financing, development, leasing and disposition of commercial, mixed-use and multi-family residential properties.

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Greg Muccilli practices in real estate development, commercial financing, commercial leasing and land use counseling, particularly in New Haven County, Connecticut.  His experience includes counseling clients in the acquisition, financing, development, leasing and disposition of commercial, mixed-use and multi-family residential properties.

As a member of the firm’s Opportunity Zones team, Greg advises clients on various aspects of the Qualified Opportunity Zones program.