Taxpayers, who decide to make investments in a Qualified Opportunity Zone, will be able to temporarily suspend tax payments on the amount of eligible gains. It is important to mention that in order to qualify for tax exemption, the investment must be made through a Qualified Opportunity Fund. In order to certify a Qualified Opportunity Fund the investor must meet the following criteria:
- Hold 90% of the assets in a qualified opportunity zones property
- File for a federal income tax return (as partnership, LLC or corporation)
- Be ready for investment purposes and invest in s Qualified opportunity zone property
How to meet the 90% investment standards
Qualified opportunity funds must hold their standard investments of 90% of their assets in a qualified opportunity zones property. This is one of the most important requirements in order to qualify, and if you have questions a legal expert can certainly help. You need to carefully protect your assets and make smart choices when it comes to investing, so a highly skilled and experienced lawyer can always help you navigate through this difficult topic.
Opportunity zones represent disadvantaged communities and here the fresh investments can be eligible for tax incentives, given the investors adhere to the strict rules imposed. The main aim of this program is to encourage the flourishing of these communities and provide a long-term investment vehicle in such low income communities. Ever since it has been implemented, the program was quite successful. The program helped creating new hob opportunities in these areas, while investors could enjoy the tax incentives.
The US Department of Housing and Urban Development puts at the disposal of investors the Opportunity Zones Map that can be consulted. Using this map, investors can easily research the opportunity zone strategies available in given territories. It is important to mention that any individual or corporation can actually invest unrealized capital into an opportunity fund. However the fund must always adhere to the strict regulations set by the IRS and file the right paperwork in time- in case you need help with paperwork, a legal expert can always help.