November 2018

Polsinelli's recent Opportunity Zones webinar addressed long-awaited Proposed Regulations and a Revenue Ruling recently issued by the IRS, regarding key issues involved with investing in and forming Qualified Opportunity Zone Funds (“OZ Funds”) and the OZ Fund’s investments in Opportunity Zone Businesses (“OZ Businesses”). 

Five Key Takeaways

  • Land is not included for purposes of the original use and substantial improvement test
  • Partners will have 180 days from the end of a partnership’s taxable year to invest their capital gain in Opportunity Zones
  • There is a 31-month safe harbor for working capital in OZ Businesses that have a written play that identifies the funds and has a schedule of expected expenditures
  • “Substantially all” as used for the tangible asset test means 70%
  • Opportunity Funds will be able to borrow funds without creating a separate investment that is ineligible for the 10-year exclusion

The full webinar is available here.

Additional resources from the webinar are available here.

Related eAlert: IRS Issues Proposed Regulations for Qualified Opportunity Zone Funds

Related News: U.S. Treasury’s Opportunity Zones Program Creates Opportunity for Polsinelli’s Newest Practice to Stimulate Economic Growth and Job Creation with Client Partners