Now that we have all had a chance to celebrate a Merry Christmas, a Happy Kwanzaa or a Happy Hanukah, and have had the chance to digest 544 pages of final OZ regs – what, you say you have not really studied the new final regs yet – can’t be the case :) !
Read more in our new Opportunity Zones blog.
On Friday, December 6th, the IRS/Treasury delivered to the White House’s Office of Management and Budget (OMB) , approximately 500+ pages of final regulations for Opportunity Zones. Hey now!
Read more on our new Opportunity Zones blog.
Much going on this week friends – so jumping right into the OZ pool today:
Updated Regulations; Timing – while we were originally hearing that the next set of regulations were supposed to be issued by the IRS and Treasury before April 15th, we have now heard as of earlier this week that it is more likely that the next set of regulations will be issued by the end of April rather than by the 15th. We will keep asking for updated timing and keep you apprised.
White House Appointment – Scott Turner was named the executive director of the White House Opportunity and Revitalization Council. Turner will head up the committee that was established by President Trump in December to help implement and optimize use of federal resources connected to the opportunity zones (OZ) incentive. Turner previously served in the Texas House of Representatives from 2013 through 2017.
Disaster Opportunity Zones – Sens. Marco Rubio, R-Fla., and Rick Scott, R-Fla., introduced new federal legislation that would allow governors to nominate new areas hit by 2018 hurricanes and California wildfires as opportunity zones (OZs). The Disaster Opportunity Zones Act (DOZA) would enact a new round of OZ designations for North Carolina, South Carolina, Georgia, Florida and California.
If passed Governors will be able to select the greater of 25 tracts or 25% of low-income census tracts in their states affected by natural disasters from January 1, 2018 through March 1, 2019. Curious that the flood ravaged central states of Nebraska, Iowa and Missouri were not included but maybe they will be (and maybe the end date of March 1 will be extended) as discussions commence on this proposal.
We will keep our eye on this draft legislation and keep you all apprised as and if this progresses but surely an interesting way to funnel incentive dollars to assist in rebuilding efforts that will be critically necessary.
Keep on keeping on – deals are indeed getting done despite the lack of the second set of regulations – best regards friends. -Brad
While I am sure there is some logical explanation, I am a bit puzzled at the moment having just read a blurb from Novogradac regarding a tax bill in New York State –
According to the report, New York State Sens. Michael Gianaris and Jessica Ramos introduced a bill that would eliminate state tax incentives for capital gains when investing in federal qualified opportunity zones (OZs).
Yes, you read that correctly – eliminate state incentives for investing in the OZ…hmm aren’t we trying to incent people to invest in low and moderate income areas Senators?
S.B. 3401 would be effective for tax years beginning on and after Jan. 1, 2018. The bill, designed to eliminate a NY state incentive to participate in the OZ incentive, was assigned to the Senate Budget and Revenue Committee.
While I can totally appreciate that some might be frustrated by what looks like the rich getting richer regarding certain large companies being incented to come to the New York and receive the benefits of not only a federal incentive in deferral and reduction of capital gains but to then add New York local and state benefits as well might seem like too much, but these benefit to companies like Amazon and Google and others should be weighed in the context of job creation, economic multiplier effect to the local economy and local job creation for local zip codes and for folks who live in the area. I look forward to hearing from the Senators’ on their rational for eliminating the benefit – maybe too much of a good thing? Should be interesting to say the least.
p.s. congrats to our friends Joe Scalio, Rich Blumenreich, and Ruth Tang, in case you have not heard about it or seen it, but they were all named to the Top 50 in OZs nationally – a worthy honor – have a super weekend!
On October 19, the U.S. Treasury Department issued the much-anticipated proposed regulations for the federal Opportunity Zone (OZ) tax incentive program created under the 2017 Tax Cuts and Job Act, as well as related Revenue Ruling 2018-29.
The guidance indicates that a second set of proposed regulations will be issued later in the year that will address issues such as defining “original use,” the treatment of assets sold by a Qualified Opportunity Fund (QOF) and logistical issues with respect to the movement of tangible assets of a QOF business in and out of an Opportunity Zone.
Read the full text of this Alert on the Duane Morris LLP website.