Thermopolis named opportunity zone

The Tax Cuts and Jobs Act, signed on December 22, 2017, includes a provision regarding opportunity zones. This new investment tool offers taxpayers the ability to defer and decrease capital gains taxes over time by reinvesting those gains in real estate, equipment, infrastructure, or equity investments in designated zones.

Governor Mead, in partnership with the Wyoming Business Council, submitted nominations — among which Thermopolis was one — for Wyoming opportunity zones to the U.S. Department of Treasury Secretary Steven T. Mnuchin on April 19. They were certified on May 18th.

According to information from the IRS, an opportunity zone is an economically-distressed community where new investments, under certain conditions, may be eligible for preferential tax treatment.

The zones are designed to spur economic development by providing tax benefits to investors. First, investors can defer tax on any prior gains until the earlier of the date on which an investment is sold or exchanged, or December 31, 2026, so long as the gain is reinvested in a qualified opportunity fund. Second, if the investor holds the investment in the opportunity fund for at least ten years, the investor would be eligible for an increase in basis equal to the fair market value of the investment on the date that the investment is sold or exchanged.

Qualified opportunity funds are an investment vehicle set up as either a partnership or corporation for investing in eligible property that is located in an opportunity zone and that utilizes the investor’s gains from a prior investment for funding the opportunity fund. People do not have to live in an opportunity zone to take advantage of the tax benefits.