What is an
An Opportunity Zone is an economically-distressed community where new investments, under certain conditions, may be eligible for preferential tax treatment. Localities qualify as Opportunity Zones if they have been nominated for that designation by the state and that nomination has been certified by the Secretary of the U.S. Treasury via his delegation of authority to the Internal Revenue Service.
What are Opportunity Zone Funds?
Opportunity Zone Funds are investment vehicles created for investors to take advantage of the recent tax code changes. The changes allow for a reduction in capital gains tax through investments in qualified “Opportunity Zones”. Kingsway Capital Group, LP is a limited partnership created for the purpose of investing directly into a portfolio of diversified assets located within the Kingsway redevelopment area.
What is special about the Kingsway Zone?
The Kingsway Zone is a qualified Opportunity Zone recognized by the Department of Treasury. It is made up of 207 acres of both commercial and residential properties currently under a 10 year redevelopment plan which began July 2018. Projects within the redevelopment area can qualify for a 10 year tax abatement, historic tax credits and other State and Federal subsidies created specifically for urban renewal.
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 QOF for at least ten years, the investor may elect to exclude from tax any appreciation in the value of the investor's interest in the QOF between the date the investor first invested in the QOF and the date that the QOF investment is sold or exchanged.