Sills Cummis has learned that later today the Internal Revenue Service will be releasing the long-awaited regulations for the new federal Opportunity Zone program together with a revenue ruling and a key document, the Form 8996 for self-certification by OZ funds. Please return to this site over the weekend and beyond for a continually-updated summary and analysis of the program rules.
The federal opportunity zone program offers the potential for directing new and significant capital investment to some of the country’s areas in need of development. When describing the program, we have referred to it as the next big thing in economic development that could usher in the greatest transfer of wealth this country has seen in decades. However, as federal regulators continue to delay in issuing any meaningful guidance, many investors, fund managers and project developers are waiting on the sidelines until some of the biggest questions and uncertainties surrounding the program get resolved. Furthermore, as more examples are fleshed out and discussed amongst practitioners, investing in a Qualified Opportunity Fund may not be the optimal investment strategy for certain taxpayers depending on the specific facts involved. This is particularly true in the case of taxpayers who own appreciated real estate; for them, 1031 like-kind exchanges may still be more attractive.
As seen on: HousingFinance.com
By: Catalina Vielma
Opportunity Zones have officially become the industry’s buzz phrase for 2018. Since the passage of the Tax Cuts and Jobs Act, we have watched governors designate which census tracts they want to favor and listened as the states forecast the potential impact on their local economy. As I visit developers and housing finance agencies across the country, I continually hear this question: “It sounds great, but how do Opportunity Zones work with housing tax credits?”
As seen on: ROI-NJ.com
By: Tom Bergeron
Ted Zangari, chair of the Redevelopment Law Practice Group at Sills Cummis & Gross P.C. in Newark, is one of the most prominent public incentives and real estate attorneys in the state. His law firm colleague Jaime Reichardt chairs the firm’s state and local tax practice and has advised clients on all sorts of complicated federal and state taxation issues.
As seen on: Bisnow.com
By: Joseph Pimentel, Bisnow Los Angeles
In Downtown Long Beach, million-dollar homes, high-end condominiums and luxury apartments line Ocean Boulevard, just a few steps from the beach. The waterfront has high-rise hotels, towering office buildings and chic retail and restaurants. The city also has pockets of abject poverty.
Opportunity Zones, created by Trump’s tax law, are meant to help the heartland thrive and make the country more equal—but can they pull it off?
As seen on: TheAtlantic.com
By: Annie Lowrey
FRESNO, Calif.—Census tract 06019000100 has a lot going for it. Locals cheer the melting-pot atmosphere, the arts scene, the nearby nature, and the affordable housing—affordable in national terms, which feels all the more amazing given that it is a quick drive both to the grandeur of Yosemite and to the tech hub of the Bay Area. Start your car up and grab a coffee here at 9 a.m., and you could be standing in downtown San Francisco or in front of Apple’s headquarters by noon.
If you or your companies or clients are holding appreciated property of any kind, whether in the form of investments like stock, bonds, or a passive investment in a pass-through entity, or in the form of vacant land or a commercial or residential building, or other capital assets, there is a new opportunity to sell the property and defer and reduce the capital gain, while investing in a new business or property that could potentially be sold tax-free.
The Federal tax reform bill enacted earlier this year contains a new tax incentive aimed at directing capital and investment into America’s distressed areas. The new program is called the Opportunity Zone program.
Late last week, the governors of New York and Pennsylvania submitted their selections for opportunity zone designations to the U.S. Department of Treasury. Those nominations are expected to be approved by Treasury to take advantage of the new federal tax incentive program. The federal Opportunity Zone program is a new tax incentive designed to direct investor capital into various low-income and distressed areas around the country. The program affords investors the opportunity to defer and reduce capital gains that are invested in opportunity funds. In addition, an investor who holds an interest in an opportunity fund for 10 years or more does not pay any tax on the gain when the opportunity fund investment is sold or transferred. Additional details can be found in an earlier article we published here.
A listing of New York’s 514 zone nominations can be found here.
A listing of Pennsylvania’s 300 zone nominations can be found here.
We will continue to keep you updated as more details emerge on this transformative program, including expected guidance from the Internal Revenue Service regarding qualified opportunity fund certification and qualified opportunity zone property.
The U.S. Department of Treasury’s Community Development Financial Institutions Fund has just released the list of New Jersey’s approved Opportunity Zones. The Opportunity Zones are identified by specific census tracts provided below.
The federal Opportunity Zone program is a new tax incentive designed to direct investor capital into various low-income and distressed areas around the country. On March 21, Governor Murphy submitted New Jersey’s list of eligible census tracts seeking Opportunity Zone designation.
New Opportunities for Urban and Distressed Areas
The newly enacted federal Opportunity Zone program could be a game changer for economic development and tax incentive policy here in New Jersey and across the country. The program provides a new avenue for directing investment into certain urban and distressed areas with significant tax benefits.
The Opportunity Zone program was enacted as part of the recently signed Tax Cuts and Jobs Act and provides an opportunity to defer current capital gains and reduce future gains for investing in certain funds organized to direct capital into businesses and property based in the specified zones. The designated zones are selected by the Governor of each state from certain eligible low-income community census tracts, or those eligible for New Market Tax Credit projects.