QOFs can run any trade or business directly, even a sin business, which was a shocker to me in the final regulations. You'll just need to make sure you're in compliance with the other OZ rules.
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What kind of businesses will qualify to be included in a QOF?
What kind of businesses will qualify to be included in a QOF?
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Most businesses qualify if they are located in an OZ. However, it must be a true trade or business and it can't be one that is identified within the OZ tax code and regulations as a "sin business," including massage parlors, liquor stores, gambling facilities, country clubs, golf courses, hot tub facilities, suntan facilities, racetracks, etc.
Most active businesses, except for a few sin businesses.
Any business that meets the tests included in the Regulations will qualify to receive investment from a QOF. The tests are: Substantially all (70%) of the tangible property owned or leased by the trade or business is QOZBP; gross Income requirement; use of intangible property requirement; nonqualified financial property limitation. In addition, it can not be a sin business.
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