OPPORTUNITY ZONES

Federal Opportunity Zones in Northwest Georgia

Federal Qualified Opportunity Zones were created by the Federal 2017 Tax Cuts and Jobs Act and designed to spur economic development by bringing private investment to areas that might otherwise have difficulty attracting it. Opportunity zones consist of low-income census tracts nominated by the State of Georgia and comprise economically distressed areas where new investments may be eligible for preferential tax treatment and the resulting investments.

Five census tracts in Northwest Georgia are designated as qualified opportunity zones. These zones are located in Floyd County (Census Tract 11 and 16), Gilmer County (Census Tract 803), Polk County (Census Tract 104), and Walker County (Census Tract 202). Located mainly in urban/suburban areas, these tracts offer residential, commercial, and industrial development and redevelopment opportunities. The following incentives are offered to investors who put their capital to work in these qualified opportunity zones: 1. Temporary, capital gain tax deferral: • The period of capital gain tax deferral ends upon 12/31/2026 or an earlier sale 2. A step-up in basis: • Investment held for 5 years – Basis increased by 10% of deferred gain (90% taxed) • Investment held for 7 years – basis increased by another 5% of deferred gain (85% taxed) 3. Forgiveness of additional gains • Investment held for 10 years – Basis equal to fair market value; forgiveness of gains on appreciation of investment of sale or exchange of Opportunity Fund investment. This exclusion only applies to gains accrued after an investment in an Opportunity Fund.

The following incentives are offered to investors who put their capital to work in these qualified opportunity zones: