Highlights of the Final Opportunity Zone Regulations

December 18, 2019

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IRS Finalizes OZ Regulations
The much-anticipated finalization of the rules governing Qualified Opportunity Zone investing have received official approval. The consensus is that they provide the necessary clarifications for investors to confidently move forward. The proposed regulations include several general clarifications including: what types of property qualify as Qualified Opportunity Zone Business Property, guidance on the penalty imposed for failure to meet investment standards, and reporting requirements for Qualified Opportunity Funds when an investor divests from the QOF.

Some other important clarifications include:

How large C Corporations can invest in opportunity zones.
Expansion of the working capital safe harbor.
Aggregation of property for the substantial improvement test.
Vacancy period to allow a building to qualify as original use.
70% use test for tangible property.
Leased property.
Location and use of intangible property.
The final regulations are not only detailed but also quite flexible in most respects. The Final Regulations Frequently Asked Questions can be downloaded here.


The entire 544 page document can be downloaded here.


Ashley Dillard, CCIM

Senior Director

Ashley has an extensive knowledge of the Chicago commercial real estate market. After graduating from University of Kansas with a degree in architectural studies, she worked in Kansas City as a commercial leasing agent at a 2.1 million square foot office park. While working for an institutional owner, she learned valuable skills such as client reporting, communication and accountability.


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Opportunity Zones By The Numbers


The total number of census tracts certified as Opportunity Zones by the U.S. Treasury.


Potential unrealized capital gains eligible for Qualified Opportunity Fund investment and tax treatment.


Treasury Secretary Steven Mnuchin’s estimate of private capital that will flow into Opportunity Zones.