In December 2017, Congress enacted The Tax Cuts and Jobs Act (the “Tax Cuts Act”). Included in that tax legislation is what has come to be called the opportunity zone incentive (“OZ Incentive”): a host of dramatic new tax incentives designed to promote the infusion of capital into low-income areas in all fifty states and U.S. territories. In a breathtakingly short time by funds-world standards, the OZ Incentive has spurred the creation of a new private funds asset class that is focused on taking advantage of these tax benefits. The OZ Incentive has generated excitement across a range of industry participants: traditional private fund sponsors, real estate and merchant banking firms, family offices, and impact and sustainability investors, to name just a few.
