InfO-Zone blog

Am I Out-of-Bounds?

Posted by John Gahan on May 14, 2019 8:49:59 AM

Every golfer knows there is a penalty attendant to hitting the ball out-of-bounds. In business, as with golf, being "out-of-bounds" when dealing with the Internal Revenue Code has penal consequences too. But there the analogy falters when applied to opportunity zones, because while golfers can see the out-of-bounds markers and the other staked penalty areas, for opportunity zones those stakes are not yet visible.

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Topics: Opportunity Zones

Massachusetts Department of Revenue Issues Draft Technical Information Release Addressing Opportunity Zones

Posted by Dan Ryan on May 10, 2019 5:17:08 PM

On May 9, 2019, the Massachusetts Department of Revenue issued for practitioner comment a working draft Technical Information Release ("TIR") addressing the Massachusetts corporate excise and personal income tax ramifications of the federal Opportunity Zone provisions. Due to the different dates upon which Massachusetts conforms to the Internal Revenue Code (the "Code"), corporations will benefit and individuals will not.

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Topics: Opportunity Zones

Recent Opportunity Zone Guidance Gives Developers a Shot In the Arm

Posted by John Balboni on Nov 9, 2018 3:28:47 PM
Clarification on Working Capital, Substantial Improvement and Use of Leverage will Drive Investment Activity
Developers  intuitively understood the powerful nature of the new Opportunity Zone legislation, but their enthusiasm was hampered without further guidance. The answer to their calls for clarity came on October 19 th   when the Treasury Department issued proposed regulations, as well as Revenue Ruling 2018-29. Developers quickly recognized that the overall tenor of the newly issued guidance is "investor-friendly" and speaks to an overall theme of driving unbridled economic activity to the targeted opportunity zones. Specifically, three key points stand out to accelerate the flow of investment into Opportunity Zones, namely (i) flexible timing to deploy capital; (ii) a less-restrictive test on how measure substantial improvement; and (iii) making use of leverage to maximize development.
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Topics: Opportunity Zones, Qualified Opportunity Funds, Real Estate Finance, Real Estate Development, Affordable Housing, Real Estate Investment

The Land of OZ Explained — Understanding the New Opportunity Zone Proposed Regulations

Posted by John Gahan on Nov 2, 2018 5:08:33 PM

Once again our Ozone Working Group knocked it out of the park with close to 100 eager participants at our panel explaining the Treasury’s proposed regulations on Opportunity Zones.

Our guest panelist, Ryan McCormick from the Real Estate Roundtable, a national thought leader and closely connected to those who are responding to the industry, provided valuable insight in what may come next. Ryan will be joining our New York panel next week on November 8.

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Topics: Opportunity Zones, Treas. Regs.

Structuring Opportunity Zone Funds

Posted by Dan Ryan on Oct 26, 2018 4:38:32 PM

The Opportunity Zones Program created by the U.S. Tax Cut and Jobs Act of 2017 (the "OZone Program") and the first wave of proposed regulations issued by the Treasury Department on October 19, 2018 (the "Regulations") have been designed to generate economic activity in low-income urban and rural communities. Sullivan & Worcester’s Opportunity Zones Practice Group has analyzed the OZone Program and Regulations and has successfully structured multiple Qualified Opportunity Funds ("QOFs") with an anticipated aggregate capital raise of nearly $600 million.

As we and our clients continue to develop innovative QOF structures, we will provide a series of advisories that highlight specific structuring elements that are consistent with the OZone Program and the Regulations.

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Topics: capital gains, Opportunity Zones, Qualified Opportunity Funds, QOF

New IRS Regulations Will Help Spur Investment But More Guidance Is Needed

Posted by Joseph B. Darby III on Oct 25, 2018 12:09:16 PM

Info-Zone-blog_email-notification-masthead_601-x-189The Tax Cuts and Jobs Act (TCJA), passed in late 2017, contained many headline-grabbing new tax provisions, and during the initial wave of public reaction and acclaim the Opportunity Zones Act (Ozone Act) embedded in the TCJA was largely overlooked.  However, the Ozone Act has proven to be something of an iceberg, with only the tip visibly exposed: Beneath the surface, Ozones have developed into something quite large – and perhaps enormous.

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Topics: Opportunity Zones, Treas. Regs.

Treasury Department Releases Investor-Friendly Proposed Opportunity Zones Regulations

Posted by Benjamin Armour on Oct 23, 2018 3:02:11 PM

On October 19, 2018, the Treasury Department issued highly-anticipated proposed regulations related to the U.S. Tax Cut and Jobs Act of 2017's Opportunity Zones Program (the "Proposed Regulations"). Taxpayers and investors have been anxiously awaiting guidance from the Treasury Department before funneling millions of dollars into the previously designated Opportunity Zones. The Proposed Regulations clarify certain fundamental aspects of the Opportunity Zone Program and address specific complex issues.

Ultimately, the Proposed Regulations confirm many of the theories and opinions that Sullivan & Worcester’s Opportunity Zones Practice Group previously advanced and provide several investor-friendly provisions that should dramatically accelerate the creation of Qualified Opportunity Funds ("QOFs") and the deployment of capital into Opportunity Zones. Although the Proposed Regulations are not final, and remain subject to a public comment period and further review by the Treasury Department, taxpayers and investors should feel confident relying on the Proposed Regulations.

The Proposed Regulations confirm several threshold issues, including:

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The Land of OZ: Measuring Results

Posted by John Balboni on Oct 22, 2018 4:30:00 PM

John Gahan authored the article "The Land of OZ: Measuring Results," which was published in the October 2018 issue of Tax Credit Advisor.

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Topics: Tax Law, Opportunity Zones

Treasury Department Forwards Proposed Opportunity Zones Regulations to OMB

Posted by Benjamin Armour on Oct 22, 2018 4:15:00 PM

Client Alert: On September 12, 2018, the Treasury Department announced that its proposed Opportunity Zones Regulations have been forwarded to the Office of Management and Budget ("OMB") for review. This is the final step before the proposed Opportunity Zone Regulations will be issued to the public for comment.

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Topics: Tax Law, Opportunity Zones

Welcome to the InfO-Zone

Posted by John Gahan on Oct 22, 2018 3:56:29 PM

2017's federal tax legislation introduced "Opportunity Zones," a new community reinvestment tool designed to use tax incentives to drive long-term investment to rural and low-income urban communities throughout the nation. The Opportunity Zone program is the first new national community investment program in over 15 years and has the potential to be the largest economic development program in the U.S. This broad legislation will benefit many stakeholders from individual taxpayers to developers and fund sponsors.

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Topics: Tax Law, Opportunity Zones


About the Blog

Sullivan's InfO-Zone blog features insight and analysis about Opportunity Zones, written by our multi-disciplinary team of lawyers from our Tax, Real Estate, Affordable Housing and Corporate practice groups. 

The material on this site is for general information only and is not legal advice. No liability is accepted for any loss or damage which may result from reliance on it. Always consult a qualified lawyer about a specific legal problem.




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