Budget & Taxes (Economic Development)

This bill creates tax incentives for investors who put capital gains into "qualified distressed opportunity funds" that invest in designated distressed communities. It allows taxpayers to defer recognizing capital gains from property sales if they invest the proceeds in these funds within 180 days, with the deferred gains being recognized by 2033 or when the investment is sold. The bill establishes specific requirements for "distressed opportunity zones" (including brownfield sites and National Priorities List facilities) and for the funds themselves (requiring at least 90% of assets to be invested in qualifying property). It includes provisions that increase tax basis for investments held for 5, 7, or 10 years, with the most significant benefit coming after 10 years of holding. The policy aims to encourage long-term investment in economically distressed areas through specific tax treatment.

The CREATE JOBS Act (S 2056) changes U.S. tax rules to accelerate business deductions. It allows immediate 100% expensing for qualified property (like equipment) placed in service after 2017, eliminating step-by-step depreciation. For residential and commercial real estate, it introduces a "neutral cost recovery" adjustment that modifies annual depreciation deductions based on economic changes. It also eliminates the option to amortize research and experimental expenses over 60 months, requiring businesses to deduct these costs immediately in the year incurred. These changes directly affect businesses purchasing equipment, owning rental properties, or conducting R&D, aiming to boost investment and cash flow.