A new fund hopes to take advantage of last year's federal tax reform to put $100 million or more into real estate development in Minnesota's most disadvantaged communities.

Across Minnesota, 128 census tracts have been designated opportunity zones under the Tax Cut and Jobs Act of 2017, marking them as low-income communities in need of investment.

Under the tax reform law, states can designate up to 25 percent of low-income census tracts as opportunity zones. Minnesota's opportunity zones, which were approved in May by the U.S. Department of the Treasury, range from the heart of Minneapolis to nearly all of Cook County.

"To take advantage of an opportunity zone, investors must make business or development investments through a qualified investment fund," said April Hamlin, a securities lawyer with Ballard Spahr in Minneapolis who has worked with opportunity zone funds. "If you hold your interest in the fund for 10 years, what happens is, if you sell in year 11 or later, the gain you would otherwise realize on that investment—that is basically eliminated from tax [liability]."

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