Tax reform created a significant new economic development tool, Qualified Opportunity Zones, that encourages private investment in businesses, projects and commercial property located in designated census tracts. New IRC Sections 1400Z-1 and 1400Z-2 will allow real estate and other investors to defer current capital gains, significantly increase basis in long-term investments, and qualify for tax abatement by reinvesting capital gain proceeds in Qualified Opportunity Funds.
Governors from all states have now designated areas as Qualified Opportunity Zones eligible for tax-advantaged investment for a period of 10 years. In October 2018 the IRS issued regs which provide clarity on the types of gains eligible for deferral, related party transactions, and the treatment of REIT capital gains. It has also indicated that the approval process for Qualified Opportunity Funds is on a self-certification basis by funds on initial tax return filings.
To leverage 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. Further, the Qualified Opportunity Fund must maintain at least 90% of assets in Qualified Opportunity Zone property, directly or through equity or partnership holdings. Counsel must grasp structuring requirements to qualify for, and preserve, these tax benefits through the life of an investment.
Our panel will give real estate and finance counsel a working knowledge of Qualified Opportunity Zones and Qualified Opportunity Funds created in 2017 tax reform and further clarified by 2018 tax regulations. The panel will discuss capital gains deferral, tax-free treatment of long-term appreciation, and other tax benefits associated with making real estate and other business investments in Qualified Opportunity Zones, eligibility requirements, the process for getting fund approval, fund formation, and more.
We will review these and other critical issues:
• What are Qualified Opportunity Zones and how are they determined?
• What are the tax deferral and tax abatement features of qualifying investments?
• 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?
• Timing issues and strategies for investment in Qualified Opportunity Funds
• Substantial improvement test
• What significant questions are subject to further Treasury guidance or proposed Treasury Regulations?
• How might Qualified Opportunity Funds be used in real estate development and finance and can they be twinned 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.
For more information or to register :
Or call 1-800-926-7926
Ask for Qualified Opportunity Zones: New Tax Incentives on 6/20/2019
Mention code: ZDFCA