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IRS and Treasury release proposed regulations for new federal Opportunity Zone program

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Today the IRS and Treasury released proposed regulations under Internal Revenue Code Subchapter Z – Opportunity Zones, which was added by the 2017 tax reform legislation and enacted on December 22, 2017. Through the Opportunity Zone program, investors are able to inject capital into low-income communities and promote long-term economic growth through a variety of investment vehicles. Investors also may receive significant tax benefits that include (1) tax deferral for capital gain invested in a qualified opportunity fund, (2) elimination of up to 15% of the tax on the capital gain that is invested in the qualified opportunity fund, and (3) potential elimination of tax when exiting a qualified opportunity fund investment. At the same time, municipalities gain access to private capital for the benefit of distressed communities. 

PwC will publish detailed analysis of the proposed regulations within the coming days. For additional information on the statutory enactment of the Opportunity Zone program, please see our previously published Insight Qualified opportunity funds provide tax incentives for investors.

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David Leavitt

US Real Estate Tax Technical Co-Leader, PwC US

Brian Rebhun

Asset Management Tax Leader, PwC US

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