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What are the rules regarding what can be in a Qualified Opportunity Fund?

For example, can it be a limited liability company?


Answers
  • Erik Kodesch
    June 12, 2019

    A QOF can be any entity treated as a corporation or partnership for tax purposes. This includes an S corporation and an LLC with more than one member. A single-member LLC would have to elect out if it’s default status as a disregarded entity to be treated as a corporation to be a QOF.

  • Shawn Neidorf
    June 10, 2019

    It can be a partnership or a corporation. LLCs are allowed. I'd strongly suggest you discuss the best option for you with an attorney, however. (I am not a lawyer, FYI.)

  • David LeGrand
    June 11, 2019

    A Qualified Opportunity Fund entity can be an LLC, LP or corporation. LPs and LLCs are still the most tax efficient structure. Then the fund invests in one or more q businesses.

  • Darci Congrove
    June 18, 2019

    A Qualified Opportunity Fund may invest directly in assets (like real estate), but more commonly it will invest in the stock of a corporate or a membership interest in an LLC. The business or real estate within the corporation or LLC must meet the definition of "qualified Opportunity Zone property."

  • Brad Cohen
    June 25, 2019

    LLC, partnership or stock in corporation.

  • Matthew Peurach
    June 10, 2019

    A Qualified Opportunity Fund just needs to be an investment vehicle that is organized as a partnership or a corporation. For this purpose, assuming the limited liability company has at least two members and has not otherwise elected to be treated as a corporation for tax purposes, it would be considered a partnership and, therefore, eligible to make an election to be a Qualified Opportunity Fund.

  • Matthew Rappaport
    June 11, 2019

    Generally, QOFs can only be invested in Qualified Opportunity Zone property, which falls into two broad categories: QOZ business property (QOZBP) and QOZ business equity. Generally, QOZ projects can only consist of either new or renovated real estate, or new or relocated businesses.

  • Brett Siglin
    June 11, 2019

    Yes, a Qualified Opportunity Fund can be a limited liability company.

  • Maria De Los Angeles Rivera
    June 11, 2019

    An domestic entity treated as a corporation or a partnership for federal tax purposes may self-certify itself as a QOF as long as the requirements as to investment in Qualified Opportunity Zone Business Property are met. The certification is made via Form 8996.

  • Brad Polizzano
    June 11, 2019

    In short, a QOF may hold an interest in a lower tier LLC, subject to various requirements. In particular, the QOF's lower tier interest must be a "qualified Opportunity Zone business." One of the requirements to be considered a QOZ business is that "substantially all" of the property owned by the OQZ business is "qualified Opportunity Zone business property." QOZ business property is subject to the original use test or the substantial improvement test. This is a high-level discussion. There are many nuances that would need to be fleshed out based on the particular facts and circumstances.

  • Phil Jelsma
    June 11, 2019

    It can be a partnership, LLC, S corporation or C corporation, but most are LLCs.

  • Blake Christian
    June 12, 2019

    Yes, the QOF can be either a C corp, S corp or partnership (including LLC with two members).

  • Donny Lucaj
    June 18, 2019

    A fund can be a partnership or a corporation (and LLC would be acceptable).

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