Opportunity knocks, will investors answer the call?
The second round of QOZ regulations may spur taxpayer confidence
INSIGHT ARTICLE |
The 2017 Tax Cuts and Jobs Act provided a new initiative to bring capital into specified underdeveloped areas known as Opportunity Zones (OZ). While the IRS and Treasury Department issued proposed regulations in October 2018 to put substance around this new initiative, the proposed regulations did not provide the requisite guidance to make investors feel sufficiently comfortable to invest in these designated areas. Fortunately, a second set of proposed regulations were released by the IRS and Treasury Department in April, 2019 which addressed many taxpayer concerns that may very well set the stage for capital deployment into these designated areas.
Whether you are a real estate developer, operating company, individual investor or looking to reap the benefits of additional state and local tax credits, this white paper discusses the following issues addressed by the second round of regulations:
- Types of property available for investment into a QOF
- Types of gain available for deferral into a QOF
- Clarifications related to qualified opportunity zone businesses
- Debt-financed distributions
- “Substantially All” tests
- Testing rules
For those who are looking to take advantage of the program, or gain a better understanding of the second round of regulations, download the full white paper.