Tax Credit Syndication
New OZ Regs: Substantially Improving the Substantial Improvement Test, Part I
With receipt of the final regulations from the Treasury Department, taxpayers have sufficient guidance to structure opportunity zones (OZ) investments with confidence.
The OZ incentive was enacted as part of 2017 tax reform legislation (H.R. 1). Treasury issued proposed regulations Oct. 28, 2018, and again May 1, 2019, leading to final regulations issued Dec. 19, 2019. Final regulations resolved ambiguities, corrected errors and created clarity on a number of issues that may have been sidelining potential OZ investors. The scope of the final regulations precludes a comprehensive discussion of the significant changes from the proposed regulations, so this article, which will have a second part, will focus exclusively on the revised guidance concerning the “substantial improvement” requirement. The second installment will focus on issues related to property leased to a qualified OZ business operated through a separate entity taxed as a partnership for federal income tax purposes.
Click here to read the full article written by Dawna Steelman and Jerry Breed published in the Novogradac Journal of Tax Credits.
