How Do Opportunity Zone Investments Work?

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In the United States, the location of a person's home is deeply connected to their economic outlook and their access to various opportunities. Due to a variety of factors, some communities aren’t able to offer many — or any — options when it comes to public transportation, wages, medical care and even groceries. Other communities have ample access to jobs, housing, food, good education and methods of getting around. Discrepancies in access to these necessities can affect people’s health and their ability to thrive while limiting opportunities in a way that negatively impacts quality of life for generations.

Interestingly, individual investors have a chance to help reshape these outcomes for the better. The Tax Cuts and Jobs Act of 2017 included an initiative, called Opportunity Zones, that aims to “spur economic growth and job creation in low-income communities,” according to the IRS. By allowing people to invest in Qualified Opportunity Funds, the program seeks to encourage investment in underserved parts of the United States while offering tax incentives to investors. In this article, you’ll learn more about this program, including how it works, what the eligibility requirements are — and whether it’s working as intended.