Modifications to Opportunity Zones Proposed in House Budget Proposal
In this episode of Tax Notes Unleashed, Marie Sapirie delves into the proposed alterations to the Opportunity Zone program under the Senate version of the One Big Beautiful Bill Act.
Marie, a regular contributor to Tax Notes, has recently discussed these amendments with tax expert Jessica Millett of Hogan Lovells. This engaging conversation provides a timely analysis that can help us understand potential changes the Senate may make to the Opportunity Zone program.
The Opportunity Zone program was originally established in the Tax Cuts and Jobs Act, with the purpose of providing incentives for investment in low-income areas. The new bill seeks to refine the program, addressing changes to reporting requirements, key definitions, and eligibility criteria.
Marie kicks off the conversation by asking Jessica Millett about the proposed modifications that the Senate might adopt. Jessica explains that the Senate aims to make the Opportunity Zone program permanent, a major distinction from the House's extension and reform approach through 2033.
One of the key changes in the Senate's proposal is the cycle of new zone designations every 10 years, with the first new cycle beginning on July 1, 2026, and coming into effect in January 2027. Investors can continue to reap tax benefits by reinvesting capital gains into funds that invest in businesses or real estate projects within these zones.
Marie and Jessica's lively discussion also touches on other potential adjustments, such as a possible 10% reduction of the deferred gain for investments made after 2026 that are held for at least five years.
Stay tuned for more fascinating insights on the continuing saga of the One Big Beautiful Bill Act and its impact on the Opportunity Zone program.
In the discussed conversation between Marie Sapirie and tax expert Jessica Millett, they touch upon the Opportunity Zone program being addressed in the Senate's version of the One Big Beautiful Bill Act, which may significantly influence the landscape for finance and investing in business and real-estate sectors. The bill proposes changes such as the program's permanence, new zone designations every 10 years from 2026, and possible reductions in deferred gains for investments made during that period – potential adjustments that warrant close attention as they could impact budgetary considerations in future budget bills passed by the House of Representatives and Senate, and eventually, Congress.
