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What happens if I need to move my business located in an OZ?

Is there a way for a QOZB to move to another OZ without losing the tax benefits?


Answers
  • Matt Campbell
    March 25, 2020

    I believe this is perfectly allowable but you'd have to show the move into a new QOZB later with address and information required in the informational reporting. More complex businesses can create more issues.

  • Matthew Rappaport
    March 25, 2020

    QOZBs ought to be able to move operations from one OZ to another without losing tax benefits, provided they remain in compliance with all the applicable rules.

  • Donna Mackenzie
    March 24, 2020

    Generally, a QOZB can move to another OZ provided it is a QOZB after the move. If it fails to be a QOZB after the move then the qualified opportunity fund (QOF) will generally be unable to count it as QOZB which could subject the fund to penalties. Keep in mind it is the investors in the QOF that receive the tax benefits, but if an investment fails to qualify as a QOZB then that would affect their tax benefits.

  • Samuel Weiser
    March 24, 2020

    Generally speaking, moving from one Opportunity Zone to another Opportunity Zone should preserve the tax benefits for your investors. However, you still need to meet all the requirements of a QOZB in the new location to maintain the tax benefits. As a rule, the QOZB entity must be compliant with the regulations throughout the entire holding period that the QOF (investors) are invested in the QOZB for the Investors to preserve their long-term tax benefits.

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