AIKEN, Ga. (WJBF) – Senator Tim Scott met with constituents to discuss the growth of opportunity zones.
The tax cuts and jobs act included a new federal incentive called Opportunity Zones- which are meant to encourage investment in low-income areas. Any corporation or individual with capital gains can qualify.
“You have to put together your perspectives, you have to put together your team. You have to take sometime to understand the community your investing in. So it takes a collaborative effort making it both an opportunity and an obstacle. If you’re the kind of investor who doesn’t want to spend a lot of time getting to know he community your investing in than this is not for you,” says United States Senator Tim Scott.
The program provides three tax benefits for investing in opportunity zones.
1. Temporary deferral of taxes on previously earned assets until until the end of 2026 or when the asset is disposed of.
2. Basis step-up of previously earned asset invested meaning original investment increases by 10% in five years.
3. If the investment lasts seven years, that number increases by 15%
and lastly for investments held for at least 10 years, investors pay no taxes.
“The beneficiary of the opportunity zone would be the community that exists within the zone already. They benefit by attracting more private sector dollars into area that have been voided of private sector investment and the jobs that will be created in the area and the improvement of the property will increase your net worth,” says Senator Scott.
Plans for these zones are now in place for communities in all 50 states this year. Each state nominates blocks of low-income areas and the idea is pushing people to have an open mind.
“I think it’s a great thing because a lot of time these communities have been forgotten about. They need motivation they need jobs and are in need of the opportunities,” says Monique Adams, who works in Aiken.