Qualified Opportunity Zones
HLB Gross Collins, P.C. consistently demonstrates integrity, professionalism, and technical ability. Additionally, they adhere to time deadlines, and most of all, display a concern and passion for our best interests.
Curtis A. Pollock Co-COO & J. Bruce Bolick CFO
Greystone
OVERVIEW
The Tax Cuts and Jobs Act introduced IRC ยง1400Z-2 Special Rules for Capital Gains Invested in Opportunity
Zones. This section allows a taxpayer to elect to defer or
exclude from gross income gain on the sale or exchange of any property to an unrelated
party in the tax year of the sale or exchange if the gain is reinvested in
a qualified opportunity zone ("QOZ") within 180 days
of the sale or exchange. The amount of gain that can be deferred or excluded is
equal to the amount of gain invested in the QOZ.
Qualified Opportunity
Zones are nominated as such by the chief executive officer of a state, and
certified by the Secretary of Treasury. A "state" includes any U.S. possession
and a "chief executive officer" generally refers to a state's governor. The
designation as a QOZ remains in effect for 10 years beginning on the date of
designation.
- For a list of all designated Qualified Opportunity Zones,click here.
- For a map of all designated Qualified Opportunity Zones,click here.
DEFERRAL/EXCLUSION OF GAIN
The election allows
the gain to be deferred until:
- The investment is sold
or exchanged, or
- December 31, 2026,
whichever is earlier
When the taxpayer
reinvests in a QOZ property, the basis in the investment is initially zero.
However, basis can be increased by holding onto the investment for the
following periods of time.
- 5 years - basis is
increased by 10% of the gain originally deferred.
- 7 years - basis is
increased by 15% of the gain originally deferred.
- 10 years - basis is
increased to be equal to the FMV of such investment on the date it is sold.
There are some complications with this adjustment because of the sunset date
mentioned above.
DEFINITIONS
Qualified Opportunity Fund - Any investment vehicle which is organized as a corporation
or a partnership for the purpose of investing in QOZ property that holds at
least 90% of its assets in QOZ property.
Qualified Opportunity Zone Property - Includes property which is:
- QOZ Stock
- QOZ Partnership
Interest
- QOZ Business Property
For additional information, please contact your
tax advisor at HLB Gross Collins, P.C.
Gross Collins has been a trusted partner for close to thirty years. The firm has been by our side as we faced the various challenges our competitive industry provides. The firm has been a vital part of the team which guided us to the successful company we are today.
Tracy Pierce, COO
Precision Concrete Construction Inc.
I am happy to write this recommendation regarding the professionalism, integrity, and technical expertise of HLB Gross Collins P.C. (HLB). The professionals at HLB always exhibit an exceptional level of competence while diligently working to adhere to deadlines.
Additionally, HLB Gross Collins, P.C. applied their expertise in calculating the U.S. GAAP deferred tax provision. The firm exhibited tremendous tax knowledge in this area and we were impressed by their expertise.
I am happy to recommend HLB Gross Collins, P.C. based on their international expertise, specifically related to GAAP, as well as their technical ability and attentiveness to quality and personal relationships.
Randall Mertz, President & CEO
ORAFOL Americas Inc.