Through the federal Opportunity Zone program, banks, communities, investors, companies, and others may create Opportunity Funds to direct tax-advantaged investments to one of several opportunity zones in the Roanoke Region of Virginia.
- The primary benefit of investing in an Opportunity Fund is a temporary deferral of capital gains taxes until December 31, 2026, as long as the Opportunity Zone investment is maintained until that date.
- Secondly, there is a step-up in basis for capital gains reinvested in an Opportunity Fund. The basis is increased by 10 percent if investment in the Opportunity Fund is held by the taxpayer for at least five years and an additional 5 percent if held for at least seven years.
- Lastly, a permanent exclusion of capital gains from the sale or exchange of an investment in an Opportunity Fund applies if the investment is held for at least 10 years.