Does My Project Qualify?
A Qualified Opportunity Fund can invest in your project if it meets the necessary requirements and limitations of the Tax Cuts and Jobs Act of 2017 and relevant regulations.
Qualified Opportunity Funds must invest at least 90% of the fund’s assets in one of the following three types of property:
- Qualified Opportunity Zone Stock, which is stock in a Qualified Opportunity Zone Business that is taxed a corporation.
- Qualified Opportunity Zone Partnership Interest, which is a partnership interest in a Qualified Opportunity Zone Business that is a taxed as a partnership (e.g., a limited liability company).
- Qualified Opportunity Zone Business Property, which, in general, is tangible property acquired after December 31, 2017 and either originally used in the Opportunity Zone or substantially improved in the Opportunity Zone.
To be a Qualified Opportunity Zone Business (i.e., a business in which a Qualified Opportunity Fund can invest), your business, must meet the following requirements:
- At least 70% of the tangible property your business owns or leases must be Qualified Opportunity Zone Business property (i.e., acquired after December 31, 2017 and also meet either the original use or substantial improvement test).
- At least 50 percent of your business’s total gross income must derive from the active conduct of an active trade or business within the Opportunity Zone.
- A substantial portion of the intangible property your business owns must be used in the active conduct of a trade or business.
- Less than five percent of the average of your business’s aggregate unadjusted bases of the property of the business is attributable to nonqualified financial property.
- Your business’s trade or business must NOT be any of the following:
- private or commercial golf course,
- country club,
- massage parlor,
- hot tub facility,
- suntan facility,
- racetrack or other facility used for gambling, or
- any store the principal business of which is the sale of alcoholic beverages for consumption off premises.
There are additional details the Treasury regulations imposed in the implementation of Opportunity Zone projects. Our team can help you analyze if your project meets the qualifications for investment from a Qualified Opportunity Fund.