Opportunity Zones Along the I-72 Opportunity Corridor
Monday, December 03, 2018
Investors now have the opportunity to reduce capital gains tax by directing their gains towards investments made in Opportunity Zones. The Federal Tax Cuts and Jobs Act of 2017 (Jobs Act) has made it possible for individual investors, corporations and trusts to benefit from current economic gains without immediately paying capital gains tax. Those liquidating stocks or selling properties, for example, can invest their gains into Opportunity Zone Funds and instead of paying capital gains tax, have that tax deferred, reduced or even eliminated over time.
How to Defer or Reduce Capital Gains Using the Jobs Act
According to the IRS, “Opportunity Zones are designed to spur economic development by providing tax benefits to investors. First, investors can defer tax on any prior gains invested in a Qualified Opportunity Fund (QOF) until the earlier of the date on which the investment in a QOF is sold or exchanged, or December 31, 2026. If the QOF investment is held for longer than 5 years, there is a 10% exclusion of the deferred gain. If held for more than 7 years, the 10% becomes 15%. Second, if the investor holds the investment in the Opportunity Fund for at least ten years, the investor is eligible for an increase in basis of the QOF investment equal to its fair market value on the date that the QOF investment is sold or exchanged.”
There are Opportunity Zones in the I-72 Opportunity Corridor
Our region has two Opportunity Zones that can benefit from investment – one is located in Pittsfield and the other is in Jacksonville. These areas were chosen by Governor Rauner with feedback from stakeholders, including the local government, Economic Development Organizations, Chambers of Commerce and community organizations. These specific Opportunity Zones were chosen because investments made here could have the greatest economic impact. According to the State of Illinois, the Governor also considered the following when selecting Pittsfield and Jacksonville -
- Natural and/or man-made amenities (Port Districts/Lakes): As a region, the I-72 Opportunity Corridor is beautiful, with many lakes and outdoor amenities.
- Existing Infrastructure: Our infrastructure and access to I-72 makes this area ideal for investment and for growing businesses.
- Investment Longevity: Pittsfield and Jacksonville are longstanding communities that have withstood changes in the economy over time. Many families have invested in the region generation after generation, giving investors confidence in the longevity of these communities.
- Equity and Inclusion: Investments made here will benefit the entire community.
The Jacksonville area is home to many growing small businesses. There is a rich and vibrant culture here of community togetherness, where everyone pitches in to support each other and the community. This has fostered a positive entrepreneurial culture, high level of civic engagement and an appetite for growth. Investors looking at the Jacksonville Opportunity Zone should look to census tract #17137952000. This particular area of Morgan County has a population of 3,666, but 5,190 people work here. This has made Jacksonville a center of regional activity, both professionally and for dining/entertainment.
Many people are familiar with Pittsfield for its’ Lincoln Heritage but there is far more to modern-day Pittsfield. The city has a diverse economy, a municipal airport, rail access and is located between two major rivers – the Illinois and Mississippi. The city’s economic development department can assist with incentives and site selection, making it easier to learn more about the local Opportunity Zone and how to best utilize it. The Pittsfield Opportunity Zone is located at census tract #17149952700. Pittsfield has a population of 4,619 with 3,355 jobs.
If you are interested in learning more about the Opportunity Zones located in the I-72 Opportunity Corridor, email Shawn Rennecker at email@example.com.