The second Treasury guidance regulations are out and they address questions regarding, among others:
- The definition of “substantially all” as it relates to Qualified Opportunity Zone Business and Qualified Opportunity Zone Property,
- Transactions that may trigger the inclusion of gain that a taxpayer has elected to defer under the Opportunity Zone program,
- The timing and amount of the deferred gain that is included,
- The treatment of leased property used by a Qualified Opportunity Zone Business,
- The use of Qualified Opportunity Zone Business Property in the Qualified Opportunity Zone,
- The sourcing of gross income to the Qualified Opportunity Zone Business, and
- The “reasonable period” for a Qualified Opportunity Fund to reinvest proceeds from the sale of qualifying assets without paying a penalty.
We are actively reviewing and digesting these regulations in real time and will be able to address any questions you have, so please feel free to reach out to us to discuss.
Treasury is already preparing a third set of additional guidance regulations, so let us know if there is something not included as Treasury has requested questions and comments.
All in all, this is an excellent step forward in assisting developers, real estate owners, investors and local communities in Opportunity Zones by providing further comfort to buy, develop, invest and welcome the benefits of the Opportunity Zone program.
Together, we remain on the cutting edge of all aspects of the Opportunity Zone program