All Forum Posts by: Scott McIntosh
Scott McIntosh has started 0 posts and replied 41 times.
Post: Opportunity Zone Real Estate Fund
- Attorney
- Lexington, KY
- Posts 41
- Votes 37
Justin -- you may have already received the clarification you were seeking, but in case you haven't, wanted to provide some insight. You are right that the 50% test for "activity in the zone" can be satisfied based on employee wages, but that is just one of five requirements for a QOZB. Those requirements are as follows:
1. Derive at least 50% of gross operating income from activities in an Opportunity Zone,
2. Deploy at least 40% of intangible property in activities in an Opportunity Zone
3. Maintain less that 5% of company assets in nonqualified financial property
4. Ensure at least 70% of the tangible property owned or lease by the Company is Qualified Opportunity Zone property.
5. Avoid operation of a private or commercial golf course, country club, massage parlor, hot tub facility, suntan facility, racetrack, gambling establishment, or a store whose principal business is the sale of alcohol for consumption off premises.
The 4th requirement is of particular importance with regard to the real estate company in your hypothetical. Though they could own some non-OZ property, 70% of the property owned or leased by the company would need to be qualified opportunity zone property.