You unlock this opportunity with the recognition of gain. Beyond is an opportunity … an opportunity of deferral, an opportunity of reduced recognition of gain, an opportunity of permanent exclusion of gains related to the appreciation on a Qualified Opportunity Fund (QOF) investment after a 10-year holding period. You’re moving into a land of both clarity and remaining uncertainty, of guidance received and guidance yet to come. You’ve just crossed over into the Opportunity Zone with returning guest Derek Smith!

TIMESTAMPS OF QUESTIONS COVERED

[01:18] What’s an eligible gain?
[04:32] Can partnerships and S corporations be investors in QOFs?
[05:23] What if the partnership or S corp chooses not to invest in a QOF?
[07:08] Did we get guidance on working capital?
[09:00] Does the guidance give us what we’ve been waiting for on QOFs?
[9:57] What’s “substantial improvement”?
[13:58] How is trade or business defined for this purpose?
[16:09] Do we know what “used primarily within the QOZ” means yet?
[18:24] Do we have to worry about the passive activity loss limitation rules?
[19:07] What options do partners and S corp shareholders have if there was a midyear gain recognition event?
[21:26] Should you have QOZ FOMO?
[23:18] What happens if the designation expires during the holding period?
[26:07] What are Derek’s key takeaways from the first round of proposed regulations?

BIO FOR GUEST

Derek is a member of BKD National Construction & Real Estate Group. With technical expertise in partnerships, Derek is a firmwide resource on partnership-related issues and works with individuals and closely held businesses to help develop and implement business structures and tax savings strategies.

Connect with Derek on LinkedIn

Follow Derek on Twitter

ADDITIONAL RESOURCES

Article: Opportunity Zone Guidance Issued by IRS

Webinar: Critical New Insights on Proposed Opportunity Zone Regulations

Podcast: Episode 41: What's a Qualified Opportunity Zone?

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