Opportunity Zones have been making headlines for the past two years. The benefit of OZs for the right client in the right situation can be substantial.
Although it’s true that the additional 5% step-up in basis expired on 12/31/2019, the 10% step-up, the deferral to 2026, and the 100% OZ investment basis step-up all still apply in 2020 and even 2021. Per the legislation, investment into QOFs can be made up until 12/31/2027.
In the months following the announcement of the OZ program, expectations were very high for capital raising and deployment in QOFs. During much of 2019, deployment into OZ fell short of these lofty expectations although capital is flowing and December was very strong. Historically, programs like this take time to catch on but then can become significant forces for mobilizing capital.
The final version of the OZ regulations were published last month. These clarified many of the open items relating to qualified opportunity funds. CommonGood hosted a webinar to discuss these final regulations and why OZs are still relevant – a replay for which is available upon request at email@example.com.