Under the final regulations, certain businesses may extend the 31 month period to up to 62 months.
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What changes were made in the new regulations about the working capital safe harbor?
Did anything change when it comes to the safe harbor for start-up businesses?
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The WCSH now allows for up to 62 months of exemption for bona fide working capital, provided a business plan is in place and the taxpayer is substantially adhering to the timing set forth in the plan, AND provided the QOZB is receiving cash infusions over time and not just in a lump sum. For the WCSH to extend from 31 months to 62 months, there needs to be more than one injection of capital. The rules are not quite as simple as some of the summaries have made them out to be.
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