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Opportunity Zones

What is an Opportunity Zone?

In 2017, the Tax Cuts and Jobs Act created Opportunity Zones. These special land designations qualify investments in these areas for capital gains tax incentives. Opportunity Zones are aimed at promoting economic growth and development in underserved communities by providing tax incentives to investors. These incentives include deferral or elimination of capital gains taxes on investments made in these areas. East Central Indiana is home to several Opportunity Zones, including Muncie in Delaware County and Montpelier in Blackford County. By investing in these designated areas, businesses and investors can benefit from the tax incentives and contribute to the region’s growth and prosperity.

How an Opportunity Zone Works:

  1. Sell an asset
  2. Within 180 days of the sale of the asset, reinvest capital gains in a QOF
  3. After 5 years in a QOF, 10% of the reinvested capital gains are excluded from the federal capital gains tax
  4. After 10 years in a QOF, any appreciation on the value of the reinvested capital gains is exempt from federal capital gains tax.

Example:

  1. Jim sells an asset for $1 million and reinvests the money into a QOF within 180 days
  2. After 5 years, Jim only has to pay federal taxes on $900,000 of the capital gains of that initial $1 million sale
  3. After 10 years, his $1 million investment appreciates to $2 million. Jim only has to pay federal taxes on the first $1 million.

Muncie – Delaware County

Opportunity Zones

Muncie has 4 Opportunity Zones. In Opportunity Zones the population is about 10,000. The median household income
in these areas ranges from $20,000 to $34,000.

The table below lists all 4 Opportunity Zones in Muncie. The first two rows reflect average values for the state of Indiana and the Opportunity Zones in the State.

4 Opportunity Zones

1. Central City Downtown – 18035002800
       a. OZ Jobs: –8% 2010–2015
       b. OZ Residents: –7% 2010–2017

2. Downtown Historic Residential – 18035000600
       a. OZ Jobs: –2.2% 2010–2015
       b. OZ Residents: –19% 2010–2017

3. High Tech University Connector – 18035000700
       a. OZ Jobs: –14.6% 2010–2015
       b. OZ Residents: –31% 2010–2017

4. Eastern Gateway – 18035001300
       a. OZ Jobs: 3.5% 2010–2015
       b. OZ Residents: –2% 2010–2017

Montpelier – Blackford County

Montpelier, Indiana is entirely located within the Blackford County Opportunity Zone, which is defined by the borders of U.S. Census Tract 9751. This area extends north from CR 200N to the Wells County Line, east to the Jay County Line, and west to the Grant County Line. By being located within the Opportunity Zone, Montpelier is well-positioned to attract investment and economic development to the region. We have easy access to many highways and a short distance to Interstate 69.  The tax incentives offered by the Opportunity Zone program can help to spur growth and create new opportunities for businesses and residents alike.  Montpelier is an ideal destination for investors looking to make a positive impact on the community and the region as a whole.
For more information please click here https://montpeliercity.org/montpelier-rising/

Opportunity Zones

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