How are the proceeds from the sale of a property by a QOF treated when it comes to the 90% asset test?

Answers

• 

  Marko Belej

  Taft

  November 20, 2020

  The general rule is that such proceeds will not be a good asset (i.e., qualified opportunity zone property) for purposes of the 90% asset test. But if the property sold was qualified opportunity zone property, then the proceeds will be treated as a good asset for purposes of the 90% asset test, if the following requirements are met: (i) the QOF reinvests the proceeds in qualified opportunity zone property within 12 months of the sale, and (ii) before they are reinvested, the proceeds are continuously held in cash, cash equivalents, or debt instruments with a term of 18 months or less.

• 

  Matthew Rappaport

  Falcon Rappaport & Berkman

  November 20, 2020

  There's a window in which the proceeds are not counted as part of the test, but if the proceeds are not reinvested by the end of that window, they become bad assets for 90% test purposes.

• 

  Maria De Los Angeles Rivera

  Kevane Grant Thornton

  December 23, 2020

  The QOF will have 12 months to reinvest the proceeds in QOZP or QOZB or distribute the proceeds as necessary in order meet the 90% test.

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