In recent years, commercial real estate investors and developers have poured millions of dollars into distressed areas across New York State, rehabbing dilapidated buildings, blocks and regions with the much-needed investment.
Many investors did so, in part, to take advantage of the benefits associated with “Opportunity Zones.” The idea was simple: offer investors the opportunity to defer and reduce capital gains by encouraging them to invest in the redevelopment of areas that would otherwise be left to add to the urban blight so prevalent in and around major cities like Buffalo, Rochester and Syracuse.
Since it was passed in 2017 as part of the Tax Cuts and Jobs Act, the program has ignited a firestorm of activity among investors and developers. That’s why there was such disappointment in commercial real estate and development circles when certain provisions were allowed to lapse at the end of 2020, a time when the country was still struggling to recover from the coronavirus pandemic.
On January 19 the IRS issued Notice 2021-10 which provided limited relief for those seeking to invest capital gains, extending the window beyond the applicable 180 day deadline and extended the testing and investment requirements for Qualified Opportunity Funds.
Like most IRS regulations, there is a great deal of complexity and nuance to this extension. You can click here to review Notice 2021-10 and see in more detail what benefits this could offer you or your existing Qualified Opportunity Fund. Our team of commercial real estate attorneys and tax attorneys are also well-versed on the ins and outs of Opportunity Fund Investing. If you have any questions, or want to see if you qualify to invest before the March 31, 2021 deadline, give me a call.
Trevor M. Torcello is a shareholder of Gross Shuman P.C. who focuses his practice in the areas of commercial real estate, business transactions, agribusiness and working with emerging businesses. He has extensive experience representing various parties in complex business transactions. He can be reached at 716.854.4300 ext. 227 or firstname.lastname@example.org.