Qualified Opportunity Zone Partnership Question
I have been reading up on the benefits of investing in qualified opportunity zones. I am currently selling an investment property my partner and I have owned for awhile. My partner is not interested in expanding his real estate investments and is using this sale to cash out for upcoming retirement.. The area we own the property in has appreciated substantially from the initial purchase which made this an ideal time for him to sell.
Without going down too much of a rabbit hole, a 1031 exchange is out of the plans because of my partner does not want to pursue this. The deed to the property is in his name, but the partnership agreement will have the sale proceeds split 50/50 between us. Thus, finally we arrive at my question, could I use the portion of the proceeds I will be receiving towards an investment in a qualified opportunity zone, assuming all other legal requirements are met (i.e. set up fund, 90% investment in the QOZ, etc.)?
To illustrate my question using a simplified example: if the total proceeds of sale of the partnership owned property are 500K, and my subsequent share is 250K, could then leverage my amount due for capital gains of 250K to invest in a QOZ property? Again, using a very simple example which ignores depreciation recapture to make a more straightforward hypo.
I did not come across any section of the code covering QOZs precluding this type of investment, and will talk to my CPA, but wanted to see if anyone else had come across a similar scenario. The partnership element is the wrinkle I did not come across in other posts.