Related Practices
Article by Christopher Steele and Jasmin Severino Hernandez on “There’s Still Time To Invest In Qualified Opportunity Zones”
In an article published in the July / August issue of Business Facilities, Christopher Steele and Jasmin Severino Hernandez discuss how the COVID-19 pandemic has impacted Qualified Opportunity Zones.
“When first introduced, federal Qualified Opportunity Zones (QOZ) provided a new hope for numerous economically distressed neighborhoods in the U.S.,” explain Steele and Severino Hernandez. “The federal program was created under the 2017 Tax Cuts and Jobs Act (TCJA) to stimulate the economic development and job creation in low-income neighborhoods through the use of long-term private investments.”
They further explain the two goals of the program: (1) investment in an Opportunity Zone will revitalize the impoverished area’s economy and, (2) if a taxpayer invests eligible gain into a Qualified Opportunity Fund (QOF), and meets several other requirements regarding the type of assets held by such QOF in the Opportunity Zone, then the taxpayer will be eligible for preferential tax treatment.
“While the QOF program got off to a fast start, several issues had started to appear before the COVID-19 pandemic became wide-spread in the U.S.,” said Steele and Severino Hernandez. “When the COVID-19 pandemic caused major shutdowns in February and March 2020, many investors turned their focus away from QOFs and back to making sure that their primary businesses and assets would survive in a volatile economy.”
While COVID-19 is having a substantial impact on the economy and most businesses, it has also provided some unique opportunities with respect to QOFs.
For the full article, you may click here.