Small logo Subscribe to leading news on impact investing. Learn More
The Brief Originals Dealflow Signals The Impact Alpha Impact Voices Podcasts Agents of Impact Open
What's Next Measure Better Investing in Racial Equity Beyond Aid Beyond Trade-offs Impact en las Americas New Revivalists Women Rising in India Operation Impact
Smarter Money Women Rising 2030 Finance Locavesting Inclusive Economy Regeneration Impact Tech New Power Geographies
Slack Conference Calls Events Contribute
The Archive ImpactSpace The Accelerator Selection Tool Network Map
About Us FAQ Calendar Pricing and Payment Policy Privacy Policy Terms of Service Agreement Contact Us
Industry News Impact Management Good Business Personal Finance Faith and investing Billionaires
Gender Lens Investing Women Rising in India
SDGs Climate Finance Clean Energy Innovative Finance Full Stack Capital Long-termism
Opportunity Zones Investing in place
Entrepreneurship Return on Inclusion Good Jobs Inclusive Fintech Creative economy Housing New Schooled Well Being People on the Move
Conservation Finance Farmer Finance Financing Fish
Blockchain/AI/IoT Urban Tech Food Tech Inclusive Fintech
Human Rights Democracy and Peace News and Information
Africa Asia Europe Latin America Middle East Oceania/Australia China Canada India United Kingdom United States Growth Markets
Subscribe
Features
Series
Themes
Community
Data
Subscribe Log In
More

Opportunity zone regulations could spur small business investing



Impact and community investors have been pushing for federal rules that would ensure opportunity zone investments drive improvements and wealth creation for residents of the zones. The two fronts: encouragement for investment in small business; and basic data reporting and transparency.

Long-awaited rules released by the U.S. Treasury on Friday showed progress on the small-business front. On impact reporting, not so much. (Want to parse the regs for yourself? Have at the proposed regulations and revenue ruling, and let us know what you think.)

    • Tangible assets. Last year’s tax bill requires 90% of opportunity fund assets to be invested in qualifying property, including businesses. The new regulations say an opportunity zone business must have at least 70% of its tangible property within a zone. John Lettieri of the Economic Innovation Group, which helped develop the legislation, called that a positive first step. Businesses may hold working capital for up to 31 months, as long as they have a plan to use the capital. The ruling, “opens up significantly the kind of businesses to invest in,” tweeted Village Capital’s Ross Baird.
    • Impact reporting. The regulations don’t require any sort impact or data reporting. Also missing: Guidance on the tax treatment of interim gains reinvested by opportunity funds. Extending the capital-gains tax relief for such interim gains has been seen as friendly to business investments.
    • Explainers: Check out analyses from The National Law Review, Novogradac & Co and Stroock.

“The real success of Opportunity Zones comes down to the people who decide to develop and implement funds themselves, and the values they bring to it,” Baird tweeted. A second tranche of rules is expected by year’s end.

You might also like...