WASHINGTON — The Trump administration on Wednesday proposed new regulations aimed at making it easier for investors to take advantage of tax breaks for investing in “Opportunity Zones” in low-income areas.
The proposed regulations issued by the Treasury Department seek to clear up questions that were keeping some investors from using the tax incentives.
President Donald Trump, speaking at a White House conference to promote the program, said governors in all 50 states and U.S. territories had designated 8,700 neighborhoods as Opportunity Zones, making these economically depressed areas eligible to be used for the federal tax incentives.
The program was included in the $1.5 trillion tax cut legislation that Trump pushed through Congress in 2017.
Local Angle
Seven zones were designated in Clark County following a statewide nominating process last year: two in Washougal, one in Hazel Dell, two along the Fourth Plain corridor and two in downtown Vancouver, one of which includes The Waterfront Vancouver and the Port of Vancouver’s Terminal 1 development site.
Only one project has been announced so far to take advantage of a Clark County zone: the proposed AC Hotel by Marriott at Terminal 1. But city officials and downtown business leaders have said that more projects are likely to emerge after the Treasury Department answers some of the common investor questions.
— Anthony Macuk
The new Opportunity Zones were set up to enable private investors to reinvest profits into designated areas. The investor can get a tax benefit by deferring their capital gains taxes invested in the zones until 2026. They also get a discount of up to 15 percent on the capital gains profits invested in the zones and pay no capital gains taxes on investments in the zones held for at least 10 years.
However, the government found that use of these benefits was being limited because of concerns over how the tax rules would be interpreted. The proposed regulations unveiled Wednesday are designed to clear up the confusion.
Trump said the tax had been lowered “all the way down to a very big, fat, beautiful number of zero.”
Industry analysts said the new rules should help generate increased interest in the program.
Governors were allowed to choose up to a quarter of their states’ low-income census tracts as Opportunity Zones.
