Tax reform created one of the country’s most significant economic development programs that encourages private investment in Qualified Opportunity Zones. Opportunity Zone Funds offer favorable treatment of returns on the investment, including deferral, reduction or possible elimination of capital gains tax on the appreciation of the fund interest.
Individual states designate communities as Qualified Opportunity Zones, subject to federal approval. Specific energy projects, including renewables, mineral extraction, and oil and gas, are particularly well suited for Opportunity Zone Funds.
To take advantage of the tax benefits of the program, a taxpayer must reinvest capital gain proceeds in a Qualified Opportunity Fund within 180 days from the date of the sale or exchange of a capital asset. A Qualified Opportunity Fund must hold at least 90% of the fund’s holdings in Qualified Opportunity Zone property.
Counsel to companies and others in the energy industry must understand the structuring requirements to qualify for—and preserve—these tax benefits through the life of an investment and the interplay with other tax incentives available for energy projects.
Our panel will provide energy counsel with an understanding of Qualified Opportunity Zones and Qualified Opportunity Funds created under the new tax law. The panel will discuss eligibility requirements, formation and self-certification, as well as the tax benefits associated with investing in Qualified Opportunity Zones. The panel will also examine how Qualified Opportunity Funds can be used in energy projects and the interplay with other tax incentives.
We will review these and other critical issues:
• What are Qualified Opportunity Zones, and how are they determined?
• How are Qualified Opportunity Funds approved, and what is the preferred entity structure?
• When must the reinvestment of capital gains be made, and how long must it be held, to qualify for the tax benefits?
• How might Qualified Opportunity Funds be used in energy projects, and can they be used with other tax incentives?
After our presentations, we will engage in a live question and answer session with participants so we can answer your questions about these important issues directly. I hope you'll join us!