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THE PROBLEM <br />Comparison of race and ethnicity, Opportunity Zones and national <br />White <br />Hispanic r. <br />Black <br />Asian <br />Mher and Mixed 2a% <br />M Native American 43', <br />Opportunity Zones <br />cetthedana cmaied with oat —We, <br />p <br />bt t <br />r7 <br />R` <br />United Siates <br />Continued disinvestment and low levels of economic mobility threaten the vast majority of <br />Opportunity Zones and residents Data from Harvard University's Opportunity Insights, the <br />research organization associated with Raj Chetty's pothbreaking studies into equality of <br />opportunity in the United States, shows that today's Opportunity Zones are overwhelmingly <br />places that have struggled to deliver economic opportunity to their residents for at least a <br />generation. <br />Downtown Santa Ana IS In An Opportunity Zone <br />Opportunity Zones are a new community development incentive established to encourage <br />investment in low-income communities around the country. Opportunity Zones provide a tax <br />Incentive for investors to re -invest their unrealized capital gains into dedicated Opportunity <br />Funds. This program represents a unique opportunity to generate much -needed economic <br />activity in historically overlooked communities. The two-tier incentive structure rewards patient, <br />long-term investment and flexibly applies to a wide range of asset classes and investment use <br />cases, including in operating businesses and real estate. Here's how it works: INITIAL /5 YEARS/ <br />7 YEARS/ 10 YEARS <br />• Defer capital gains tax for holding period of Opportunity Fund investment. <br />• Temporary Deferral <br />• 10% step-up in basis on original gains. <br />• Additional 5% step-up in basis on original gains. <br />• Exemption on any taxes for capital gains earned through Opportunity Zone Investment. <br />