TAG Industrial Market Watch: April 20, 2019

Opportunity Zones- U.S. Treasury updates with another round of clarification, and it looks good.

Major takeaways from the IRS’s long-awaited release of addition O-Zone regulations include:

1. Tax benefits extended to some real estate that is currently already leased– At least 70 percent of the physical property leased must be in an O-Zone for at least 90 percent of the time the business has it leased.
2. O-Zone funds have 12 months to reinvest from the sale of a project.
3. The previously stated law that 50 percent of a business’ gross income had to come from within an opportunity zone has been clarified to include:

* 50 percent of hours of work performed OR

* 50 percent of the amount paid for services in an O-Zone OR

* 50 percent of the management or operation of the business in a zone is necessary to generate 50 percent of gross income.

Adam Abushagur

First Vice President Investments

Managing Director- TAG Industrial