Opportunity Zone Help

[Josh Starner]

I own two rental properties under and LLC which I purchased in the last year. The LLC consists of two equal partners, and both of these properties were purchased in opportunity zones. I am looking to take advantage of the tax benefits that opportunity zones can offer, and I am wondering if I can simply re-write the existing operating agreement to make the LLC an opportunity zone fund, or do I need to form a new entity and sell the properties to the newly formed opportunity zone fund. Thank you in advance!

Josh

[Greg Dickerson]

@Josh Starner there are a number of considerations.

First a qualified opportunity zone fund is not something you write into corporate or LLC documentation. It is simply a self certification you send in to the IRS at the end of the tax year.

Second you have to meet the substantial improvement test to qualify when you buy a property in the Ozone. This means you have to spend an equal amount of the value of the structure on improving the property.

There is a lot of info out there about what you can and can’t do.

As mentioned its best to speak to an. Account or tax attorney well versed in Ozones.