The Tax Cuts and Jobs Act of 2017 created an important economic development tool, qualified opportunity zones (QOZs), to incentivize private investment in businesses, projects and commercial property in economically distressed communities. Governors from all states, including Minnesota, have now designated areas as QOZs which are eligible for tax-advantages. IRC Sections 1400Z-1 and 1400Z-2 and the related regulations and guidance provide that real estate and other investors can defer current capital gains, increase basis in long-term investments, and qualify for tax abatement by reinvesting capital gain proceeds.

This webinar will provide an introduction to the requirements for investment in QOZs, and how to structure a QOZ investment to obtain the capital gain deferral and step up in the basis provided under the new tax law, with a focus on opportunities in Minnesota and recent federal developments.

Click here to register for the webinar.

Presenter

Thursday, Sept. 10, 2020
2:00 p.m. – 3:00 p.m. CST
Margaret J. Weil
Of Counsel, Minneapolis
Greenberg Traurig

 

On Dec. 19, the United States Department of the Treasury released final regulations related to investment in Qualified Opportunity Zones and Qualified Opportunity Funds (544 pages). These highly anticipated regulations and related guidance provide critical information to investors, Qualified Opportunity Funds (QOFs), and project sponsors/operators involved in real estate, venture capital, operating businesses, and project finance in Qualified Opportunity Zones (QOZs). Many provisions of two rounds of prior proposed regulations were finalized or amended, and new provisions and guidance offer further clarity in areas critical for investor evaluation.

Greenberg Traurig has broad experience working with clients in QOF fund formation and investor utilization of QOZ benefits, along with sponsor, developer, and operator project qualification under this emerging tax incentive program for economic revitalization.

Click here for the full GT Alert, which summarizes the final regulations. Stay tuned for our detailed analysis and webinars describing the impact of these new regulations.

Welcome to In the Zone: GT Qualified Opportunity Zone News. Our monthly digest of the latest federal and state developments in Qualified Opportunity Zones and Qualified Opportunity Funds and related Greenberg Traurig news and events will keep stakeholders apprised of the most pressing issues in this burgeoning space. Continue Reading In the Zone: GT Qualified Opportunity Zone News – December 2019

Welcome to In the Zone: GT Qualified Opportunity Zone News. Our monthly digest of the latest federal and state developments in Qualified Opportunity Zones and Qualified Opportunity Funds and related Greenberg Traurig news and events will keep stakeholders apprised of the most pressing issues in this burgeoning space.

President Trump’s Tweets Show Continued Strong Support for Opportunity Zones

President Trump tweets support for opportunity zones, August 18, 2019

Client Spotlight: The Real Estate Roundtable – Roundtable Opportunity Zones Comment Letter – July 1, 2019

The Real Estate Roundtable submitted a 12-page comment letter on guidance regarding Opportunity Zones on July 1, 2019, to the Treasury Department and IRS.

Treasury released proposed regulations in April 2019 that thoughtfully addressed critical issues regarding the Opportunity Zone tax incentives (see April 17 169-page Treasury regulations and IRS news release). The rules expanded on previously proposed regulations issued in October 2018.

The Roundtable believes the most recent guidance is accelerating capital formation, job creation, and productive real estate investment in struggling, low-income communities. Nonetheless, certain questions remain that warrant additional, clarifying guidance.

Congressional Recognition of Opportunity Zones “Success Stories” Growing

Rep. Glenn “GT” Thompson (R-15-PA) addressed the House in praise of a local Opportunity Zones area in his district: 

RECOGNIZING THE IMPACT OF BELLEFONTE OPPORTUNITY ZONE

Moreover, I am grateful to the residents of Bellefonte for joining as engaged citizens who are passionate about the future of their town. By taking advantage of opportunity zones, communities like Bellefonte can play a more proactive role in the future and the destiny of their town that they call home.  

Congressional Bill Introduction Spotlight

Rep. George Holding (R-2-NC) and member of the powerful Ways & Means Committee introduced legislation recently to incentivize light manufacturing location in Opportunity Zones. His bill -H.R. 3390, the “Incentivizing Investment and Job Creation in Opportunity Zones Act of 2019,” was introduced and referred to the Ways & Means Committee. More bill information can be found here.

Treasury Announces 2 Additional Designated Opportunity Zones in Puerto Rico

On June 25, The U.S. Treasury Department announced two additional qualified opportunity zones for Puerto Rico:

PURPOSE: This notice amplifies Notice 2018-48, 2018-28 I.R.B. 9, which lists the population census tracts that the Secretary of the Treasury (Secretary) designated as qualified opportunity zones (QOZs). Specifically, this notice adds two additional census tracts in Puerto Rico that have been designated as QOZs under § 1400Z-1(b)(3) of the Internal Revenue Code (Code).  With this designation, that brings the total census tracts designated for qualified opportunity zones across the states and territories to 8, 766.

Past Speaking Engagements

Aug. 13, Los Angeles:  “LA Opportunity Zones – What Impact Will OZs Actually Have & Ensuring the Right People Are Benefitted.”  GT Shareholders James O. Lang (Tax) and Sandy Presant (Real Estate) presented “Policy and Regulations: What do you need to know about new regulations and how will California interpret the program?”

Aug. 14, Los Angeles: “Qualified Opportunity Zone Investing – Update on the New Regulations.” Opportunity zones present unprecedented tax benefits. In many cases, gains from investments that are invested in these zones defer taxes on the gains until the property is sold, or 2026.  However, if the investment is held 10 years, the gain on the sale of the property is not subject to further taxation. As with most highly incentivized investment programs, the rules are complex and continue to evolve.  This discussion covered recent proposed regulations, particularly in respect to qualification requirements for application in operating businesses. Jim Lang and Sandy Presant provided unique insights into the program, including its opportunities and pitfalls.

Aug. 15, Tampa: “Qualified Opportunity Zone and Hillsborough County Economic Development Programs for Uptown Tampa.” Tampa Innovation Partnership hosted a Real Estate Breakfast to discuss development incentives in the area, including the Qualified Opportunity Zone and Hillsborough County economic development programs. GT Shareholder Jim Lang provided an introduction to the Qualified Opportunity Zone and QOZ Funds which are part of the new federal tax code through which census tracts are designated by the U. S. Department of Treasury where capital gains may be reinvested in businesses or real estate and tax payments on the gains are deferred or even eliminated. Much of the uptown area lies within designated Opportunity Zones, and the potential for the program to attract private investment could be transformative for the area. Eric Lindstrom, competitive sites and redevelopment manager for the Hillsborough County Economic Development Department, shared details about incentives and opportunities from the county that can be beneficial to developers and businesses.

Aug. 22, Jacksonville: “Opportunity Zones Conference and Marketplace – JaxUSA Partnership and JaxChamber.” Local leaders, developers, investors and small business owners convened for this event to discuss this new, exciting investment tool. Jim Lang presented on the Opportunity Zone incentive, and local experts addressed real estate and business opportunities in the greater Jacksonville region.

Upcoming Speaking Engagements

Sept. 19, Philadelphia: Greenberg Traurig is pleased to host ULI NEXT for an engaging presentation on Philadelphia Opportunity Zones – Shareholder James O. Lang will present highlights and insights on the latest regulation and guidance for this new incentive for real estate and operating business investment in targeted areas, Qualified Opportunity Zones. Learn how investor returns may be significantly increased and developer/sponsor/operators cost of capital may be incentivized through Qualified Opportunity Fund investment into the qualifying projects for job creation and revitalization of neighborhoods. For more information, contact Sharon Mangione.

Welcome to In the Zone: GT Qualified Opportunity Zone News. Our monthly digest of the latest federal and state developments in Qualified Opportunity Zones and Qualified Opportunity Funds and related Greenberg Traurig news and events will keep stakeholders apprised of the most pressing issues in this burgeoning space.

AROUND D.C.:

DCA Live Qualified Opportunity Zone Event

GT Client Kyle Walker (Principal, CEO NewGen Worldwide) (pictured, left), and Robert Maples (GT NVA) (pictured, right) attended a DCA Live Qualified Opportunity Zone event featuring Scott Turner (pictured, middle), executive director of the White House Opportunity and Revitalization Council. Mr. Turner spoke to the White House’s commitment to the dual missions of opportunity zones; economic improvement and social change. Mr. Turner was accompanied by Alfonso Costa, agency lead on Opportunity Zones, Department of Housing and Urban Development.

IN CONGRESS:

Reps. Ron Kind (D-WI)  and Mike Kelly (R-PA) Introduce Bill to Add Transparency to Opportunity Zones Program.  Companion legislation was introduced in the Senate by Sens. Cory Booker (D-NJ), Tim Scott (R-SC), Maggie Hassan (D-NH) and Todd Young (R-IN).

Read the bill here.

IN LOCAL NEWS:

“How Opportunity Zones Are Working in North Miami. The question for municipalities is how to get your town to the top of the heap for Opportunity Zones.”

The article states:

“A study by the Center for Real Estate and Urban Analysis by the George Washington University suggested this set of policies to leverage the capital investment from Opportunity Zones:

  1. Instituting “do no harm” policies that protect vulnerable populations and existing businesses.
  2. Developing a comprehensive investable project pipeline that creates long-term housing and transportation affordability while accelerating job creation.
  3. Instituting an inclusive community engagement process for determining projects and initiatives.
  4. Planning for a mix of housing affordable to the workforce you expect in the neighborhood.
  5. Updating zoning codes to facilitate a mix of uses.
  6. Encouraging development near transit, particularly projects that help meet community goals, such as affordable housing.
  7. Inventorying properties that are ripe for redevelopment. For each property, compile information about condition, ownership, tax status, liens, zoning, and any other information that a new owner might need to understand costs of acquisition.
  8. Prioritizing access within the area instead of mobility through it.”

Opportunity Zones: Here’s where Orlando businesses can benefit,Orlando Business Journal, June 3, 2019 (registration required) – Below are a few quotes from GT Shareholder James Lang:

“Orlando…has some fantastic business opportunities going on right now, both in the real estate and operating business side, both of which are affected by qualified Opportunity Zone investments.”

“The city of Orlando…has created prospectuses for the Opportunity Zones and has branded the specific areas that are Opportunity Zones. It is taking a proactive approach and a leading role so the communities retain the character the city encourages today, while also encouraging revitalization that the law intended to bring into these communities.”

UPCOMING SPEAKING ENGAGEMENTS:

July 9, 8:00 a.m. – 9:30 a.m, Tampa.: Opportunity Fund Presentation for accountants Cohen & Grieb, PA

Aug. 15, 7:30 a.m. – 9:30 a.m., Tampa: Qualified Opportunity Zone and Hillsborough County Economic Development Programs for Uptown Tampa

  • Tampa Innovation Partnership is hosting a Real Estate Breakfast to discuss development incentives in the area including the Qualified Opportunity Zone and Hillsborough County economic development programs. GT Shareholder James Lang will provide an introduction to the Qualified Opportunity Zone and QOZ Funds. Much of the Uptown area lies within designated Opportunity Zones and the potential for the program to attract private investment could be transformative for the area. Eric Lindstrom, competitive sites and redevelopment manager for the Hillsborough County Economic Development Department, will share details about incentives and opportunities from the county that can be beneficial to developers and businesses.

Sept. 19, 8:30 a.m. – 9:30 a.m – Philadelphia.: Greenberg Traurig is pleased to host ULI NEXT for an engaging presentation on Philadelphia Opportunity Zones. GT

  • Shareholder James O. Lang will present highlights and insights on the latest regulation and guidance for this new incentive for real estate and operating business investment in targeted areas, Qualified Opportunity Zones.

PAST EVENTS:

June 5: NAIOP Tampa Bay Opportunity Zone Extended Lunch Event. Jim Lang was a featured speaker (pictured at the podium below).

June 20: Qualified Opportunity Zones: New Tax Incentives for Commercial Real Estate and Other Investment, Strafford Webinar, Jim Lang Presenter

June 18: Society of Real Estate Professionals Breakfast, “Less Talk, More Action: Breaking Ground on Opportunity Zones”

June 19: GT Orlando hosted the Indian American Chamber of Commerce for an Opportunity Zones Discussion with Jim Lang

Contact Sharon Mangione with any questions.

Visit GT’s Opportunity Zone Funds page for practice details.

Welcome to the May 2019 issue of In the Zone: GT Qualified Opportunity Zone News. Our monthly digest of the latest federal and state developments in Qualified Opportunity Zones and Qualified Opportunity Funds and related Greenberg Traurig news and events will keep stakeholders apprised of the most pressing issues in this burgeoning space.

In the Administration:

Today, President Trump spoke before the National Association of Realtors’ legislative meeting and highlighted Opportunity Zones in his address.

The president stated it was “amazing the way [Opportunity Zones] worked out.” He complimented Sen. Tim Scott (R-SC) on his advocacy for the program and noted that interest is growing and “jobs that are being created in neighborhoods where people wouldn’t go before, the Opportunity Zones. And it’s starting to be seen and it’s starting to be written about.”

At Treasury:

 HOT DOCS Investing in Qualified Opportunity Funds posted May 1 in the Federal Register

May 1 Treasury regulations explained by Greenberg Traurig’s Jim Lang, Sandy Presant, and Larry Brenman:

Executive Summary: IRS Issues Second Installment of Qualified Opportunity Zone Fund (QOF) Proposed Regulations
Detailed Analysis: IRS Issues Second Installment of Qualified Opportunity Zone Fund (QOF) Proposed Regulations  

 In Congress:

Booker, Scott, Hassan, Young Introduce Bipartisan Bill to Strengthen Reporting Requirements for Opportunity Zone Tax Incentive

S.1344 — 116th Congress (2019-2020): A bill to require the Secretary of the Treasury to collect data and issue a report on the opportunity zone tax incentives enacted by the 2017 tax reform legislation, and for other purposes.

Sponsor: Sen. Booker, Cory A. [D-NJ] (Introduced 05/07/2019) Cosponsors: (3) Committees: Senate – Finance Latest Action: Senate – 05/07/2019

Read twice and referred to the Committee on Finance.

Upcoming Events:

Speaking Engagements 

For additional information, please contact Sharon Mangione.

Greenberg Traurig is pleased to provide our guidance on the Second Installment of Qualified Opportunity Zone Fund (QOF) Proposed Regulations issued by the U.S. Treasury on April 17, 2019.    

Here are the links to our two-part guidance:

Part  I –  Executive Summary: IRS Issues Second Installment of Qualified Opportunity Zone Fund (QOF) Proposed Regulations

This Executive Summary is a quick reference guide to the key changes made by the New Proposed Regulations (discussed more fully in the Detailed GT Analysis below).

 Part II –  Detailed Analysis: IRS Issues Second Installment of Qualified Opportunity Zone Fund (QOF) Proposed Regulations

This detailed analysis contains a deep dive into the technical aspects of the New Proposed Regulations and a description of the planning considerations thereunder for both QOZ fund sponsors and operators.

For more on Opportunity Zones and Funds, click here.

Welcome to In the Zone: GT Qualified Opportunity Zone News. Our monthly digest of the latest federal and state developments in Qualified Opportunity Zones and Qualified Opportunity Funds and related Greenberg Traurig news and events will keep stakeholders apprised of the most pressing issues in this burgeoning space.

At the White House

 HOT DOCSTreasury issues second round of regulations and wants public comment measuring the economic impact of QOZs.

GT Alert > Highly Anticipated Qualified Opportunity Zone Proposed Treasury Regulations Released <

In early April, President Trump named Scott Turner as the new Executive Director of the White House Opportunity and Revitalization Council.

The Administration strongly supports QOZ.

REVITALIZING AMERICAN COMMUNITIES: Opportunity Zones are a critical part of President Trump’s efforts to bring economic opportunity to communities that have been left behind.

  • The Tax Cuts and Jobs Act (TCJA) included a new Opportunity Zones incentive designed to bring investment to struggling communities across the country.
  • Under the TCJA, investors can get tax benefits by investing in communities designated as Opportunity Zones.
    • Investors receive tax benefits on capital gains that they reinvest into Opportunity Zones through investment vehicles called Qualified Opportunity Funds.
    • These benefits are structured to promote long-term investment that will help these communities recover and thrive.
  • All states, territories, and the District of Columbia nominated low-income communities to be designated as Opportunity Zones.
  • 8,762 communities home to nearly 35 million Americans have now been designated.
  • Opportunity Zones will help encourage investors to fund new businesses, develop properties, and finance construction in these struggling communities.

https://www.whitehouse.gov/briefings-statements/tax-cuts-jobs-act-generating-economic-resurgence-communities-across-country/

On April 17, the President participated in another community group outreach event on QOZs at the White House.

In the Agencies

Treasury announced the highly anticipated second round of regulations at the White House event April 17. Read about it here as well. Treasury also wants public comment on how to measure the economic impact of QOZs

HUD is asking for public comment on its existing policies, practices, planned actions, regulations, and guidance regarding HUD-administered programs and laws to identify actions HUD can take to encourage beneficial investment, both public and private, in urban and economically distressed communities, including qualified Opportunity Zones. HUD seeks input and recommendations from the public regarding potential agency actions.

In Congress 

Legislation introduced to apply Opportunity Zones to areas struggling with disaster recovery.

Upcoming Events 

Speaking Engagements

  • May 21: Opportunity Zone Summit at Dr. Phillips, Inc. Foundation with SunTrust Bank, 12:00 – 1:00 ET – James Lang
  • May 21: KBKG Opportunity Zone Deals, Separating Facts From Fiction: An Interactive Discussion with Thought Leaders in the OZ World, James Lang, Sandy Present, and Ryan Bailine, Online Webinar, 1:00 – 2:00 PT.
  • May 22: “Hold For” GT In-house Webinar on OZ – James Lang
  • June 2 to June 4: 41st Annual NYU International Hospitality Industry Investment Conference, New York Marriott Marquis – James Lang
  • June 20: Strafford CLE Webinar:  Qualified Opportunity Zones: New Tax Incentives, 1:00 – 2:30 EDT – James Lang

QOZ Conferences

  • April 25 to April 26: Novogradac OZ, Denver
  • May 9 and May 10: Opportunity Zone Expo, Las Vegas, Mandalay Bay

 For additional information, please contact Sharon Mangione.

On Wednesday, April 17, the United States Department of the Treasury released proposed regulations related to investment in Qualified Opportunity Zones and Qualified Opportunity Funds. The issuance of these highly anticipated regulations and related guidance will provide critical information to investors, Qualified Opportunity Funds, and project sponsors/operators involved in real estate, venture capital, operating business, and project finance in Qualified Opportunity Zones. Of particular importance in this release is guidance relating to the qualification criteria for operating businesses and venture capital. The release also provides further clarity in the qualification criteria for real estate development projects. Greenberg Traurig has broad experience working with clients in fund formation and investor utilization, along with sponsor, developer, and operator project qualification under this new tax incentive program.

Click here for the full GT Alert, which includes a link to and highlights of the proposed regulations.

Welcome to In the Zone: GT Qualified Opportunity Zone News. Our monthly digest of the latest federal and state developments in Qualified Opportunity Zones and Qualified Opportunity Funds and related Greenberg Traurig news and events will keep stakeholders apprised of the most pressing issues in this burgeoning space.

Legislative Updates

On Capitol Hill, Opportunity Zones continue to get a lot of attention and discussion before Tax Committees. On March 14 Treasury Secretary Mnuchin appeared before the House Ways and Means and Senate Finance Committees. There was good discussion and interest level in House Ways and Means on Opportunity Zones as the new Democrat majority assesses this component of the Tax Cuts and Jobs Act, looking to determine effectiveness in achieving new majority goals.

OMB still has the most recent Opportunity Zones rule under consideration:

AGENCY: TREAS-IRS RIN: 1545-BP04 Status: Pending Review
TITLE: Qualified Opportunity Funds [TCJA]
STAGE: Proposed Rule ECONOMICALLY SIGNIFICANT: No
RECEIVED DATE: 03/12/2019 LEGAL DEADLINE: Statutory

Past Events

Thanks to our partners for a successful event in Northern Virginia: Life Cycle of a Serial Entrepreneur – Just in Time: Qualified Opportunity Zone. 

Our panelists discussed the most recent tax legislation regarding robust tax benefits when investing in Qualified Opportunity Zones. If you’ve recently sold your company or investment for a sizable capital gain, investing in a Qualified Opportunity Fund can be an effective strategy to reduce the upcoming tax bill by deferring the gain. But timing is crucial as the tax benefits are tied to a 180-day window to invest in an Opportunity Zone Fund.

 

 

 

 

 

 

 

 

 

 

 

 

 

Upcoming Events

  • April 8: Miami-Dade County Opportunity Zones Conference & Marketplace presented by Madison Street Strategies, with James O. Lang
  • May 2: Ozone Breakfast sponsored by SunTrust and the Dr. Phillips Foundation for Orlando Not-for-Profit Entities, with James O. Lang
  • May 9 & 10: Opportunity Zone Expo, Las Vegas, Mandalay Bay, with James O. Lang
  • May 21:  Opportunity Zone Online Presentation with  Ryan D. Bailine  and James O. Lang
  • June 2-4: 41st Annual NYU International Hospitality Investment Conference, New York Marriott Marquis with James O. Lang.

For additional information, please contact Sharon Mangione.