4 Working Capital Safe Harbors For QOZ Startups

Law360 (August 14, 2019, 4:38 PM EDT) -- The Tax Cuts and Jobs Act[1] enacted a new tax regime aimed at incentivizing economic growth in certain gubernatorial-nominated census tracts in low-income communities[2], known as qualified opportunity zones or QOZs, by affording items of tax benefit[3] to taxpayers that make eligible investments in qualified entities, known as qualified opportunity funds, or QOFs.

This article discusses the interplay between conflicting requirements imposed by the new regime and highlights an old trap for the unwary that could result in massive penalties if a QOF real estate investment is not structured properly.

 

Requirements

A QOF must hold at least 90% of its...

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