If a QOZB that owns property begins to convert them into condos after their 10-year hold, to such an extent that it becomes a dealer, would this have an adverse effect on the step-up in basis to the fair market value after the 10-year hold?
In a word, no. Dealer status is fine because you are conducting a Section 162 trade or business, which is what a QOZB must do. It's tough to work out a 10-year timeline for subdividing and developing residential lots, but if you can pull it off, then it would work under the rules.
There is no problem with this.
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