OPPORTUNITY ZONE INCENTIVES ARE CREATING JOBS AND INVESTMENT IN COMPANIES IN LOW INCOME COMMUNITIES
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There is also interest in enhanced QOF certification requirements . Currently , QOFs are automatically certified by filing a Form 8996 with the IRS and structuring the investment appropriately . Currently , if the QOF does not adhere to the OZ requirements , the QOF will be subject to penalties and face other problems and risks ( including possibly losing its status as a QOF ). So , to be clear , it is extremely important for QOFs to adhere to the letter and spirit of the law and regulations even now .
The Biden administration may add additional requirements to the process of OZ certification . The Biden campaign outlined their policy goals in that plan : ( https :// joebiden . com / racialeconomic-equity /#). However , the details have not been described in particular and , as we all know , the devil is in the details . For example , when Biden cites partnering with “ nonprofit or community-oriented organizations , and jointly produce a community-benefit plan for each investment ,” is he intending for QOFs just to engage the community ( which is so commonplace
it is worth mentioning only when projects do not engage the community ) or will he require OZ project sponsors to pay a “ living wage ” and only use unionized labor to construct the property ? These details are critical . They are the difference between loading up the OZ tax incentive with crippling compliance burdens and reporting requirements and ending up with a politicized government run program versus continuing a vibrant marketplace of OZ investments and jobs in low-income communities .
The hope is that the positive changes accomplished under the OZ program will be enhanced with appropriate additional reporting requirements ( such as those proposed by Senator Tim Scott in the IMPACT Act ) and a relatively light touch beyond that .
OZs are working . Let us all hope that the new administration does not undermine the hope , change and optimism that the OZ incentive has enabled to date .
Jill Homan , is president of Javelin 19 Investments , a Washington , D . C . -based real estate development , investment , and advisory firm focused on the Opportunity Zone incentive . She has more than 15 years ' experience in real-estate development , totaling almost $ 500 million in capitalization . Homan is co-developing projects in Opportunity Zones and has successfully raised and closed OZ capital . She has applied her knowledge of emerging communities and expertise in policy and real estate to advise investors and family offices on the OZ incentive . She earned MBA and MPP degrees from Duke University , focusing on finance and authoring a thesis on urban revitalization .
Joseph B . Darby III , is a tax and business lawyer who represents companies and high net-worth individuals in tax , business , financial and estate-planning matters . Since 2017 , he has been a recognized leader in the Opportunity Zone tax incentives under Internal Revenue Code Section 1400Z-2 , and has developed a national reputation in the area .
Darby has taught twice , at Boston University School of Law , the only full-time law school course in the U . S . devoted exclusively to the OZ tax incentives , and he has twice been named by Opportunity Zone Magazine as a “ Top 25 Opportunity Zone Influencer ” in the legal profession .
Sources : 3 https :// www . novoco . com / sites / default / files / atoms / files / white _ house _ the _ impact _ of _ opportunity _ zones _ an _ initial _ assessment _ report _ 082220 . pdf
4 https :// trumpwhitehouse . archives . gov / wp-content / uploads / 2020 / 08 / The-Impact-of-Opportunity-Zones-An-Initial-Assessment . pdf
5 https :// www . wtoc . com / 2020 / 09 / 02 / gov-mcmaster-announce-major-economic-development /
6 https :// www . erienewsnow . com / story / 42265610 / whitethorn-games-named-as-first-opportunity-zone-investment-will-bring-up-to-25-jobs-to-erie
7 https :// www . bizjournals . com / atlanta / news / 2020 / 06 / 25 / tech-company-to-bring-465-jobs-to-atlanta . html #:~: text = The % 20Baltimore % 20Place % 20building % 20is , city ' s % 2026 % 20Federal % 20Opportunity % 20 Zones .& text =% E2 % 80 % 9CThis % 20facility % 20is % 20a % 20 % EF % AC % 81rst , while % 20boosting % 20the % 20state % 20economy .% E2 % 80 % 9D
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