Following the latest round of regulatory updates from the IRS, venture capital firms are raising funds or rejiggering existing ones to take advantage of the Opportunity Zone tax break.
Loren Elliott/Reuters
Venture capital funds that have been set-up are targeting companies in Scranton, Brooklyn, Newark, and Provo, Utah. Ever since Senators Tim Scott and Corey Booker, who is from Newark, pushed the Opportunity Zone legislation through, real-estate investors have been preparing funds to invest in building projects across the country.Big-money investors are piling into 'opportunity zone' funds in lower-income neighborhoods, but there are a bunch of reasons to be cautious
The newest update from the IRS gives venture capital funds more wiggle room to find attractive start-ups to invest in while also getting the tax benefits from the regulation. The original legislation stated that half of the taxable gross income must be made in an Opportunity Zone to qualify, but the most recent regulatory update stated that companies can also qualify if half of the total hours worked by employees or total dollars paid to employees were in an Opportunity Zone tract.
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