In April of this year, a group of bipartisan senators led by Tim Scott (R-SC) and Cory Booker (D-NJ) introduced the Opportunity Zones Transparency, Extension, and Improvement Act (OZ Improvement Act) which, if passed, would update the Opportunity Zones tax incentive legislation that was enacted in 2017 (the OZ Program). The OZ Improvement Act currently…

As we have written about extensively over the past couple years, under the federal Opportunity Zones tax incentive program (the “OZ Program”), taxpayers can defer, reduce, and eliminate capital gains taxes by timely investing capital gains proceeds into a Qualified Opportunity Fund (a “QOF”) and meeting a variety of other requirements. Several of the OZ…

The Lifecycle of an Opportunity Zone Investment: A Six-Part Series Part 6 Exiting an Opportunity Zone Investment As you are surely aware if you’ve read Parts 1-5 of this Series, each and every aspect of the opportunity zone investment process is both complex and, at least to some extent, fraught with uncertainty. The exit planning…

Part 5 – Structuring an Opportunity Zone Compliant Investment Once your qualified opportunity fund has been seeded with eligible capital gains, the focus turns to the investment phase. As noted earlier in this series, the “do’s and don’ts” of effectuating an opportunity zone compliant investment are the most complicated and least understood aspect of this…

Part 4 – Forming a Qualified Opportunity Fund: The Opportunity Zone Compliant Investment Vehicle In order to gain the tax advantages of investing in opportunity zones, investors/taxpayers must first timely invest capital gains proceeds into a qualified opportunity fund. A qualified opportunity fund, or “QOF”, can be any investment vehicle that is taxed as a…

Part 3 – The Opportunity Zone Tax Benefits Explained If you’ve made it to Part 3 of this Series, then you already know that the economic upside of the opportunity zone program lies in the following three categories of tax benefits: (1) the deferral of tax on capital gains that are timely invested in qualifying…

Part 2 – What Do We Know, And What Is Yet To Come? In December 2019, the U.S. Treasury Department and Internal Revenue Service issued its final regulations governing the Opportunity Zone program. These 544 pages of regulations, including commentary and examples, sought to address both the initial lack of guidance in the prior proposed…

Part 1 – Getting Started The talk of real estate (and to a lesser extent business and infrastructure) investing in 2019 was the Opportunity Zones tax incentive program promulgated under the Tax Cuts and Jobs Act of 2017. Simply put, the opportunity zone program provides generous incentives to taxpayers that invest capital gains proceeds in…

We have previously published Client Alerts summarizing the new opportunity zones tax incentive program (OZ program)created by Sections1400Z-1 and1400Z-2 of the Internal Revenue Code (Code) and proposed regulations published by the Department of the Treasury and the Internal Revenue Service in October 2018 and April 2019 (the proposed regulations). Click here to see our November…

In November 2018, we published a Client Alert summarizing the new Opportunity Zone program (OZ program) created by The Tax Cut and Jobs Act of 2017 and codified in Sections1400Z-1 and 1400Z-2 of the Internal Revenue Code (Code). The OZ program seeks to encourage investment in over 8,700 low-income and distressed communities across the country,…

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