An Opportunity Zone is a designation created by the Tax Cuts and Jobs Act of 2017 allowing for certain investments in lower income areas to have tax advantages. The purpose of this program is to put capital to work that would otherwise be locked up due to the asset holder's unwillingness to trigger a capital gains tax. 
The first Opportunity Zones were designated in April 2018. There are more than 8,764 zones in the 50 states, and five U.S. possessions, including American Samoa, Guam, Northern Mariana Islands, Puerto Rico, and the Virgin Islands.
In order to qualify, the Opportunity Fund needs to invest more than 90% of its assets in Qualified Opportunity Zone Property that is located in an Opportunity Zone. The property must be significantly improved, which means it must be an original use or the basis of the property must be doubled of the basis of the non-land assets. Capital gain taxes are deferred for investments reinvested into investments in these zones and, if the investment is held for ten years, all capital gains on the new investment are waived. Opportunity zones are census tracts which are designated by state authorities. There are 8,764 census tracts that have been designated. 
An investor will need to invest in an Opportunity Fund by the end of 2019 in order to meet the seven-year holding period and be able to exclude 15% of the deferred capital gain. An investor may exclude 10% of the deferred capital gain by investing in an Opportunity Fund by the end of 2021 in order to meet the five-year holding period.
An investor who realizes certain capital gain income may reinvest the capital gain in an Opportunity Fund within 180 days.
Prior to the law creating Opportunity Zones, an investor could defer capital gains taxes by trading one asset with another asset in the same asset class by using a Section 1031 exchange. Opportunity Zones now allow an investor to defer capital gains taxes by trading one asset with another asset in a different asset class.
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