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Volume XI, Number 336

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Qualified Opportunity Funds | OTS Series

Since coming into effect in January 2018, Subchapter Z of the US Tax Code—also known as the opportunity zone provisions—has enabled investors to pour billions of dollars into a broad array of businesses, from real estate development companies to tech startups. Investments in qualified opportunity funds (QOFs) offer a number of distinct tax benefits, not the least of which is reduced capital gains tax liability. But the rules governing these investments are quirky, perplexing and—in some cases—severely restrictive.

In the following series of articles, we discuss the benefits of investing in a QOF, offer a detailed analysis of the law surrounding the opportunity zone provisions, provide case studies that more closely examine industry-specific structuring of opportunity zones and more.

IN-DEPTH

  1. THE BENEFITS OF INVESTING IN A QOF – Why should investors consider investing in qualified opportunity funds (QOFs)? The answer to this question can help individual and institutional investors make more effective decisions when deciding if, how and when they should pursue opportunities that, assuming certain conditions are met, can offer significant tax advantages. In this first of our series of articles on QOFs, we explore the many benefits (and some of the hazards) of investing in this unique investment vehicle.

  2. HOW TO INVEST IN A QOF – You’ve decided that the benefits of qualified opportunity funds (QOFs) make this an attractive investment vehicle. But how do you go about identifying and investing in a QOF? This article discusses—from an investor’s perspective—the requirements for making an eligible investment in a QOF.

  3. WHAT IS A QOF? – How does a qualified opportunity fund actually get qualified as a QOF? Failure to satisfy the US Department of the Treasury’s definition of a QOF can severely restrict the fund’s ability to attract capital. In this third of our series of articles on QOFs, we discuss—from a fund’s perspective—the mechanics of qualifying the fund as a qualified opportunity fund.

  4. BASICS OF QOF INVESTING: WHAT IS A QOZB? – While qualified opportunity zone (QOZ) property must make up at least 90% of the property of a qualified opportunity fund (QOF), only 70% of the tangible property of a qualified opportunity zone business (QOZB) need be QOZ property. While this might sound confusing on its face, this distinction can help a QOF maintain flexibility and obtain specific tax benefits. In this fourth of our series of articles on QOFs, we discuss the entities that qualify as QOZBs and whose interests qualify as QOZ partnership interests or QOZ stock.

 

© 2021 McDermott Will & EmeryNational Law Review, Volume XI, Number 301
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About this Author

Steven Hadjilogiou, McDermott Law Firm, Miami, Corporate and Tax Law Attorney
Partner

Steven Hadjilogiou focuses his practice on international inbound and outbound international tax planning for multinational companies and high net worth individuals. Steven has represented various Fortune 500 companies and major privately held businesses in their tax planning and supply chain projects, and also has substantial experience advising on transfer pricing, tax-related intellectual property matters, Subpart F and foreign investment in US real property. Steven also advises clients on pre-immigration planning and cross-border wealth succession. Steven has also...

305-347-6521
Keith Hagan Tax Attorney McDermott Will & Emery Law Firm
Associate

Keith Hagan focuses his practice on international tax planning, treaty issues, and corporate and partnership taxation. He advises multinational corporations, partnerships and individuals on a myriad of US tax matters. Prior to joining McDermott, Keith was an international tax attorney at a reputable international law firm.

305-347-6505
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