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10.19.18

Opportunity Zone rules—what will they say?

The 30 member strong Nixon Peabody, LLP Opportunity Zone Working Group has blogged, written and lectured for the past 10 months about Opportunity Zones. Today Treasury has released proposed rules for what is described as a $100 billion real estate and business opportunities in 8700 low income communities around the US.

 

While some transactions have closed and others are in process, most have been on the sidelines awaiting further Treasury Department guidance.  The more potential investors looked at Opportunity Zones the more granular questions came up.  We came up with many possible answers but it is clear that without more guidance there remained a material question as to whether the IRS would agree.

 

Linked below is Forrest Milder’s article Just published setting out twenty hot topics for Opportunity Zones:  https://www.bna.com/insight-twenty-hot-n73014483463/


Over the past few weeks it became clear that regulations were coming and today Treasury released an outline and Regs are shortly to follow.  The Regs are now out at:  

https://www.irs.gov/pub/irs-drop/reg-115420-18.pdf

 

While the Regs are out already there are reports about great solutions such as excluding  the value of the land when meeting the test to invest 100 percent of the acquisition basis of existing property.  That would make feasible projects in low income but high land cost areas.  

Tags: AFHS Alerts