Only rollover capital gains qualify for the OP Zone tax incentives.
Ask A Question
How can an OZ investor contribute other property, in addition to cash, in exchange for an eligible interest in a QOF?
How can an OZ investor contribute other property, in addition to cash, in exchange for an eligible interest in a QOF?
Answers
Do it, but you only get credit for the basis. Balance is considered a non-qualifying investment.
It's OK to do so, but the property itself cannot qualify as QOZBP, and if there's any built-in gain, the property portion of the contribution is treated as a mixed investment. I generally do not recommend that clients do this unless there is no other choice.
An investor may contribute property, but in general, the property will not be considered QOZP and therefore may affect the fund's 90% test.
DISCLAIMER:the information found on this website is intended to be general information; it is not legal or financial advice. Specific legal or financial advice can only be given by a licensed professional with full knowledge of all the facts and circumstances of your particular situation. You should seek consultation with legal and financial experts prior to participating in any aspect relating to Opportunity Zones. Posting a question on this website does not create an attorney-client relationship. All questions you post will be available to the public; do not include confidential information in your question.