This post discusses the top ten things you need to know about the Federal Opportunity Zone Program.

1. Which Gains Are Eligible? – The Deferred Tax Gain can be related to a wide variety of capital assets sold by the investor, ranging from: the sale or disposition of land, developed real estate, stock or bond portfolios, artwork, collectibles, Bitcoin or other cryptocurrencies, as well as other tangible and intangible assets.  The Deferred Tax Gain must be reinvested into a Qualified Opportunity Zone Fund (QOF) within 180 days of recognizing the tax gain on sale (note there are beneficial timing rules for gains reportable from a partnership). Timely reinvestment will generally allow deferred gain reporting until the earlier of December 31, 2026, or the date the QOF is sold.

2. Qualified Opportunity Fund Requirement -Taxpayers wishing to participate in the QOZ program must do so through a QOF.  The statute provides a fairly straightforward process to meet the QOF requirements.  The entity must be either: i) a C Corporation, ii) an S Corporation or iii) a Partnership (including an LLC electing to be taxed as a partnership).  A QOF can represent a single investor or multiple investors.
Read More