Like-Kind Exchanges Versus Opportunity Zone Investments

Palmer McArthur

CHARLOTTE, NC—As investors and developers ease into 2019, Opportunity Zones (OZ) and Like-Kind Exchanges (LKE) are being seriously examined as capital movements are determined. The similarities and differences between OZ benefits and LKE benefits can be significant and deserve more attention as investors and developers weigh the pros and cons as they contemplate projects and next steps for this new year.

The Opportunity Zone, part of the 2017 Tax Cuts and Jobs Act, is designed to attract investment capital into economically distressed areas. If the Opportunity Zone concept succeeds, the effects could transform specific blighted areas. In return for their investments, investors receive several tax benefits, which vary depending on the amount of time the capital remains invested in a Qualified Opportunity Zone.