A Qualified Opportunity Fund—organized as a corporation or partnership—is a means of investing in a qualified opportunity zone property or properties which holds 90 percent of its assets in qualified opportunity zone property. It’s important to note that a Qualified Opportunity Zone Property cannot invest in another fund. To become a Qualified Opportunity Fund, an eligible corporation or partnership must self-certify by filing Form 8996, Qualified Opportunity Fund, with its federal income tax return.
Here at GBQ, we can help determine if this type of fund is right for you and your business.
- Assistance with fund structuring
- Assistance with complex financial modeling and projections, including analysis of IRR with Opportunity Zone benefits
- Integration of tax credits with other tax incentives
- Review and provide comments on various transaction documents, including private placement memorandum and Qualified Opportunity Fund organizational documents
- Analyze yield calculations and projections in private placement memorandums
- Consultation with issues related to:
- Managing timing requirements imposed by statutes and regulations, including initial and ongoing capital contributions
- Operating distributions with consideration of potential redemption and resulting tax consequences
- Refinance/Debt financed distributions
- Character of debt and effect on basis and potential of limitation/suspension of tax losses
- Method of accounting for purposes of 70% and 90% asset tests
- Exit strategies
- Analysis of carried interest
- Analyze applicability of IRC § 163(j) interest expense limitation at Qualified Opportunity Fund