IRC 1400Z Qualified Opportunity Zones for Individual Investors: Tax Deferral and Reduction Opportunities

Claiming Capital Gains Tax Mitigation, Basis Step-Up on a Qualified Opportunity Fund Investment and Disposition

Note: CLE credit is not offered on this program

Recording of a 110-minute CPE webinar with Q&A


Conducted on Thursday, December 19, 2019

Recorded event now available

or call 1-800-926-7926
Program Materials

This webinar will provide tax advisers with a practical guide to understanding the tax incentives made available to investors under Internal Revenue Code Section 1400Z-2. The panel will discuss the mechanics of Code Section 1400Z-2 and the proposed regulations issued in October 2018 and April 2019. We will discuss how to qualify for tax benefits by investing in a qualified opportunity fund (QOF), the requirements to create and maintain QOFs and qualified opportunity zone (QOZ) businesses, and the key areas of law that remain uncertain.

Description

The new opportunity zone provisions found in Section 1400Z-2 of the Internal Revenue Code represent perhaps the most significant economic development tax incentive program in several decades. Code Section 1400Z-2 allows taxpayers to defer, reduce, and in some cases eliminate the tax on capital gains by enabling taxpayers to reinvest capital gain proceeds in a QOF. These funds are established to inject investment capital into designated low-income communities to promote economic growth.

Additional proposed regulations provided answers and clarifications for several open issues. Included in the April 2019 regulations are safe harbor tests for meeting the 50% test for gross income derived within a QOZ and provisions allowing leased property to qualify as QOZ business property.

Listen as our panel discusses the benefits of the new QOZ tax incentive program as an investment tool for taxpayers, the necessary legal requirements and processes to obtain tax credits, and techniques to ensure deferral or reduction of capital gains.

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Outline

  1. Opportunity zone overview
  2. Policy and current political considerations
  3. Qualified opportunity fund structures
  4. Opportunity zone investment requirements and mechanics
  5. Real-world examples and issues
  6. Incentive comparison-- “Q-ville”
  7. Filing and documentation requirements

Benefits

The panel will review these and other key issues:

  • What are QOZs and the eligibility requirements under Code Section 1400Z-1?
  • What are QOFs and QOZ businesses?
  • How taxpayers can form and operate their own QOF and/or QOZ business.
  • How taxpayers can ensure deferral, reduction and/or elimination of capital gains tax liability.
  • Recent IRS guidance on gain deferral and the how to satisfy the various "substantially all" asset and operational requirements.

Faculty

Karachale, Christopher A.
Christopher A. Karachale

Partner
Hanson Bridgett

Mr. Karachale advises individuals and business entities on a broad range of tax planning and tax controversy matters....  |  Read More

Messerschmidt, Jeffrey
Jeffrey C. Messerschmidt, CPA

Partner
Navolio & Tallman

Mr. Messerschmidt works closely with the firm’s business and individual clients across a range of industries,...  |  Read More

Shaver, Daren
Daren R. Shaver

Attorney
Hanson Bridgett

Mr. Shaver is a transactional tax attorney, helping clients achieve their objectives in a practical and tax-efficient...  |  Read More

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