Qualified Opportunity Zones: Navigating Federal and Ohio State Income Tax Incentives for Real Estate Investment-Qualified Opportunity Zones: Navigating Federal and Ohio State Income Tax Incentives for Real Estate Investment

Qualified Opportunity Zones: Navigating Federal and Ohio State Income Tax Incentives for Real Estate Investment

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Video Summary

Andrew Daup explained federal and Ohio Opportunity Zone tax incentives for real estate and development projects. He noted that Opportunity Zones are low-income census tracts designed to attract private investment, and Ohio is unique because it also offers a state Opportunity Zone tax credit. The federal program provides three main benefits: deferral of capital gains tax, a partial reduction of the deferred tax bill, and tax-free appreciation on an investment held for at least 10 years, plus a depreciation recapture exemption.<br /><br />He outlined key compliance rules, including the need to invest through a Qualified Opportunity Fund, the 180-day investment window, related-party restrictions, and requirements for qualified property and businesses. He also compared Opportunity Zones to 1031 exchanges, stressing that OZ benefits are temporary and place-based.<br /><br />For Ohio’s credit, he said eligible projects can receive a 10% state income tax credit on total project cost, funded through a competitive application process and available for both equity and debt capital. He emphasized that timing is critical and that clients should engage with the governor’s office now regarding future zone nominations.<br /><br />He concluded by discussing “Opportunity Zones 2.0,” effective January 1, 2027, which make the program permanent, tighten eligibility, add reporting requirements, and provide larger incentives for rural zones.

Keywords

Opportunity Zones

federal tax incentives

Ohio tax credit

real estate development

Qualified Opportunity Fund

capital gains deferral

1031 exchanges

state income tax credit

Opportunity Zones 2.0