If you need new equipment, you can raise capital to allow for the business to purchase this equipment. Additionally, you can use this to raise capital for the construction of a new site for your expanding business.
Ask A Question
How can my existing business, which was operating within an OZ prior to 2018, benefit from the OZ initiative?
What do I need to do to get my assets treated as eligible?
Answers
Broadly, you can either move your existing business to a different OZ or "wash out" your tangible property for brand new tangible property. In either approach, your business would need to issue a new class of equity to the OZ investors, file a new document with the Secretary of State, and revise its governing agreement.
Your assets are not the issue. Opportunity Zones allow capital gains to be rolled over with tax deferral and if held for 10 years, gains on the investment are excluded from income.
A business will be a Qualified Opportunity Zone business if it meets several tests. Some of them include: 70% of the property purchased or leased after Dec. 31, 17 originally used in a zone. If not originally used it must be substantially improved; 50% of gross income derived in the zone, and several safe harbors are provided; it is not a sin business; not more than 5% of its assets are financial assets as defined.
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.