The original use test applies both to the Qualified Opportunity Zone Business (QOZB) and the Qualified Opportunity Fund (QOF) because “original use” related to Qualified Opportunity Zone Business Property (QOZBP), and QOZBP must be acquired either by QOF or QOZB. According to 1400Z-2(d)(2)(D), the term QOZBP means tangible property used in a trade or business of the QOF or QOZB if: (I) such property was acquired by the QOF or QOZB by purchase (as defined in section 179(d)(2)) after Dec. 31, 2017; (II) the original use of such property in the qualified opportunity zone (QOZ) commences with the QOF or QOZB, or the QOF or QOZB substantially improves the property, and (III) during substantially all of the QOF’s or QOZB’s holding period for such property, substantially all of the use of such property was in a qualified opportunity zone. With regards to "original use”, Reg 1.1400Z2(d)-2(b)(3) provides the original use of tangible property in a QOZ commences on the date any person first places the property in service in the QOZ for purposes of depreciation or amortization, or first uses it in a manner that would allow depreciation or amortization if that person were the property’s owner. Original use property will commonly include things like new equipment, machinery or buildings purchased or constructed in QOZ, and even used tangible property that is brought into a QOZ from a non-QOZ location.
