Among the sweeping changes ushered in by the 2017 Tax Cuts and Jobs Act, the benefits related to the nearly 9,000 geographic areas designated as Qualified Opportunity Zones (QOZs) look to be some of the greatest tax incentives introduced by the act for taxpayers, investors, sponsors, and the private equity and real estate industries. Intended to encourage investment in low-income communities, the rules affect a wide variety of taxpayers and present compelling near-term planning opportunities for taxpayers with capital gains looking to invest in Qualified Opportunity Zone Funds (QOFs). The new regime also provides advantages for investors and sponsors of investment vehicles.
Our cross-practice Opportunity Zone Fund team draws on the firm’s deep bench of tax lawyers—including leaders in the partnership taxation arena as well as former IRS and US Treasury Department officials—in assisting clients with developing novel solutions to the challenges raised by forming QOFs in an uncertain regulatory environment.
Our tax lawyers work closely with our real estate and private equity lawyers to advise a wide range of clients across the United States in navigating the new rules associated with the formation of, and investment in, QOFs. We also assist clients in forming real estate and private equity funds. Additionally, we assist in establishing QOZ businesses (QOZBs) and provide consultations with investors and sponsors regarding QOF formation and investment issues.
The Internal Revenue Service and US Department of the Treasury issued final regulations on Qualified Opportunity Funds on December 19, 2019. The regulations contain more than 500 pages of guidance and address significant changes and additions from the first two sets of proposed regulations.
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