Unlocking Tax Advantages with Opportunity Zones in Cincinnati and the Tri-State Area
Opportunity Zones (OZs) offer a powerful tax incentive for investors looking to support economic growth in underdeveloped areas. Established under the Tax Cuts and Jobs Act of 2017, these designated census tracts encourage long-term investments in low-income communities by offering significant tax benefits. For investors and business owners in Cincinnati and the broader Tri-State area, these incentives present a unique opportunity to build wealth while fostering local economic development.
Understanding Opportunity Zones and Their Tax Benefits
Opportunity Zones are designed to attract private capital into economically distressed areas by offering tax advantages for reinvested capital gains. Key benefits include:
- Deferred Capital Gains Taxes: Investors can defer paying capital gains taxes on profits reinvested into a Qualified Opportunity Fund (QOF) until December 31, 2026.
- Potential Reduction in Tax Liability: If the investment is held for at least five years, investors receive a 10% exclusion on the original deferred gain. Holding for seven years increases the exclusion to 15%.
- Tax-Free Growth on New Investments: Gains on investments held in a QOF for at least 10 years are entirely tax-free upon sale, making Opportunity Zones a compelling strategy for long-term investors.
How Opportunity Zones Have Impacted Growth in the Tri-State Area
Cincinnati and the surrounding Tri-State region, which includes parts of Kentucky and Indiana, have seen notable redevelopment thanks to Opportunity Zone investments. Neighborhoods such as Over-the-Rhine, Avondale, and Price Hill have benefited from increased capital flow, leading to new businesses, affordable housing projects, and infrastructure improvements. These investments have revitalized communities, created jobs, and spurred economic development in areas that previously struggled to attract funding.
How BHMK Law Can Help
Navigating Opportunity Zone investments requires careful legal and tax planning to maximize benefits and ensure compliance with IRS regulations. Buechner Haffer Meyers & Koenig (BHMK) provides guidance in:
- Structuring Qualified Opportunity Funds (QOFs) to ensure eligibility for tax incentives.
- Due diligence and compliance to help investors assess potential projects and avoid pitfalls.
- Tax planning and optimization to help clients leverage the full financial advantages of Opportunity Zone investments.
- Transactional support for businesses and developers seeking to benefit from OZ funding.
For investors and business owners interested in Opportunity Zones, strategic legal counsel is essential.
Contact BHMK today to explore how you can take advantage of opportunity zone incentives while contributing to economic growth in Ohio and beyond.
