Established by the Tax Cut & Jobs Acts of 2017, Opportunity Zones are designed to spur long-term private sector investments in low-income communities. It is the first new national community investment program in over 15 years and has the potential to scale into the largest economic development program in the U.S. which can also be combined with other economic development incentives.
Opportunity Zones (OZ) provide new tax benefits for taxpayers (including individuals, partnerships, and corporations) that invest certain assets in certified Qualified Opportunity Funds (QOF). Businesses can invest realized capital gains in Opportunity Zones via Qualified Opportunity Funds. A few of the benefits include:
- Deferral – Defer the invested capital gain until December 31, 2026;
- Tax-Free Appreciation – 10% Basis Step Up if invested for 5 Years;
- An additional 5% Basis Step Up if invested for 7 Years; plus,
- Tax Forgiveness – Any post-investment appreciation will also be tax free if it is held in a Qualified Opportunity Fund for 10 years.
Taft brings together experienced professionals from across the firm’s practice areas to provide clients coordinated direction on the federal OZ program. Our attorneys leverage their knowledge of tax, finance, real estate, project finance, private equity, securities and corporate law to advise investors, real estate developers, private equity fund managers and other client in establishing Qualified Opportunity Zone Funds and investing in Qualified Opportunity Zones Businesses. We can assist with:
- Creating fund products;
- Ensuring compliance with securities law;
- Meeting eligibility requirements for qualified OZ properties;
- Evaluating potential opportunities for investments; and
- Complying with tax obligations for investment in OZ funds.
- Prepared the organizational documents and private offering materials for investment in hotels, retail centers and other OZ real estate projects.
- Representing a development group in connection with the development and capital raise for a mixed use development of a 284 unit apartment complex, 75,000 sq. ft. of retail space and a hotel property in North Carolina.
- Representing a minority owned developer and investor in data centers in opportunity zones with its first project, a mini-data center located on the campus of Kennedy King College in Chicago.
- Advised investors and OZ Fund managers on tax planning and entity structure matters.
- Representing a development group in connection with the development and capital raise for a mixed development of a 126 room hotel, 11,000 sq. ft of mixed use retail space and a 253 space municipal parking garage located in Manchester, Vermont.
- Represented an OZ revitalization of an historic building for a residential apartment complex in Georgia.
- Representing an OZ investment for an estate that has $170M+ assets and has incurred substantial capital gains since the decedent’s date of death.
- Prepared the organizational documents and the private offering materials for an entertainment complex to be built across from a popular local brewery in the Over-The-Rhine neighborhood of Cincinnati.
- Working with a social enterprise organization to develop a social impact fund for women, minority, and veteran business investment in the State of Ohio, with an emphasis on OZ opportunities.