Build A Qualified Opportunity Fund With Galena Partners

1. Build A Qualified Opportunity Fund With Galena Partners The qualified opportunity fund is the path to tax incentives and the opportunity zone program. A qualified opportunity fund (QOF) is an investment vehicle by a corporation or partnership that invests in qualified opportunity zone property. These investors must hold 90% of assets in qualified opportunity zone property. Meeting the 90% investment threshold The percentage is calculated by the average of the percentage of qualified opportunity zone property invested in the qualified opportunity fund. It is measured; 1.On the last day of the initial six-month period of the taxable year of the fund 2.On the last day of the taxable yearly period of the fund

2. Filing requirements For corporations and partnerships to certify and maintain a qualified opportunity fund, they must file Form 8996 of the QOF annually. Filing should be done with the eligible partnership or corporation federal tax return. Form 8996 should be filed before the due date of the tax return. The documents must include a statement detailing the purpose of the corporation or partnership investing in a qualified opportunity zone fund. It should also include the details about the qualified opportunity zone business that the quality opportunity fund should engage directly or via a top-tier operating company. Other requirements For the entity to qualify for opportunity zone tax incentives, taxpayers must invest taxable gains into the qualified opportunity fund. This happens within 180 days from the date the capital gains would be considered for federal income taxes. In addition, the investors will receive an eligible interest in return from the qualified opportunity fund. A QOF eligible interest is an equity interest given by the qualified opportunity fund, including stocks and partnership interests with special allocations. Eligible interest, therefore, excludes any debt instruments.

3. Compliance tests For newer qualified opportunity funds, the date for testing the conformity with the standard 90% investment will vary. The variations depend on when the QOF validates its first month as a qualified opportunity fund. A qualified opportunity fund certifying on any month before the beginning of a fiscal year must test compliance twice with the 90% investment standard. The first testing happens on the last day of the first 6 months from the month the qualified opportunity fund was certified. What is a qualified opportunity zone property? Qualified opportunity zone property is; Qualified opportunity zone stock A qualified opportunity zone stock is any stock in a domestic corporation if; The QOF acquired the stock After December 31, 2017, directly or underwritten from the corporation for cash exchange. The enterprise was a qualified opportunity zone business when the stock was issued. Qualified opportunity zone partnership interest This refers to any capital or profit interest in a domestic partnership if; The QOF acquired the interest After December 31, 2017, from the partnership for cash exchange. The interest was acquired when the partnership was a QOFZ business. Qualified opportunity zone business property A qualified opportunity zone business property refers to any tangible property a QOF used for trade and business. All 50 states in the United States of America, including Washington, D.C, have opportunity zones, including the five United States territories. The zones are determined by the state, county, and census tract numbers. Content Source: https://bit.ly/3L9D8Zi