IRS Revenue Procedure 2018-16, Guidance on Designating Census Tracts as Qualified Opportunity Zones

In February 2018, Internal Revenue Service (IRS) issued Revenue Procedure 2018-16 providing guidance to state and territorial governors and the mayor of the District of Columbia on the necessary procedure for designating census tracts as Qualified Opportunity Zones (QOZ) in order to take advantage of the new Opportunity Zones program established in the recently enacted tax reform bill. The Opportunity Zones program allows taxpayers specialized tax treatment, including deferred capital gains, for investments in Opportunity Funds, which must, in turn, invest at least 90 percent of their assets in businesses located in certain low-income communities designated by governors as QOZs.