May 1, 2019

Sluggish Response to Opportunity Zone Program

Opportunity Zone Site

Response from renewable developers has been slow to the Tax Cuts and Job Act of 2017’s Opportunity Zone program, with only 11 Qualified Opportunity Funds (QOFs) focused on renewable energy since the program began. The program provides capital gains tax benefits for renewable investments in up to 8,700 federally designated areas. The program allows investors to defer taxes and gains put into QOFs, the vehicles used to invest in the zones, until December 2026. Investors who hold their investments for five to seven years can increase their basis on the investment by 10 to 15 percent, cutting taxes by an equal amount…. Read more

Jan 22, 2019

Final Pass-Through Deduction Rules Grant Welcome Relief for Rental Real Estate Activities

Rental Real Estate - Sign in Yard

On Friday, January 18, 2019, the Treasury Department issued final rules under IRC Section 199A. As part of this regulation package, Treasury also provided much-needed relief and clarity for rental real estate activities.  This development creates some hope that similar rules may be in store for Opportunity Zone Funds. Background IRS Section 199A is a tax incentive for pass-through entities and sole proprietorships.  It effectively reduces the federal tax rate on income arising from certain activities by as much as 20%.  Thus, if income from an activity qualifies, a taxpayer who would otherwise pay taxes at the current top federal… Read more